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Published: 2020-08-06

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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 June 30, 2020

☐

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)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Trading

Title of each class

Symbol(s)

Name of each exchange on which registered

Common Stock

TCX

NASDAQ

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 thepreceding 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 past90 days: Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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 growthcompany. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the ExchangeAct.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

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 revisedfinancial 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 August 4, 2020, there were 10,567,610 outstanding shares of common stock, no par value, of the registrant.

Table of Contents
	TUCOWS INC.
		Form 10-Q Quarterly Report
	INDEX

	PART I
		FINANCIAL INFORMATION

Item 1.			Consolidated Financial Statements	3

			Consolidated Balance Sheets (unaudited) as of June 30, 2020 and December 31, 2019	3

			Consolidated Statements of Operations and Comprehensive Income (unaudited) for the three and six months ended June 30, 2020 and 2019	4

			Consolidated Statements of Cash Flows (unaudited) for the three and six months ended June 30, 2020 and 2019	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	48

Item 4.			Controls and Procedures	49

	PART II
	OTHER INFORMATION

Item 1.			Legal Proceedings	50

Item 1A.			Risk Factors	50

Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	51

Item 3.			Defaults Upon Senior Securities	51

Item 4.			Mine Safety Disclosures	51

Item 5.			Other Information	51

Item 6.			Exhibits	51

Signatures				53
					TRADEMARKS, TRADE NAMES AND SERVICE MARKS

						Tucows®, EPAG®, Hover®, OpenSRS®, Platypus®, Ting®, eNom®, Roam®, Roam Mobility®, Bulkregister®, Ascio®, Cedar®, 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 thisQuarterly 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 oftheir respective owners. Solely for convenience, any trademarks referred to in this Quarterly Report may appear without the ® or TM symbol, but such references arenot 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, orthe right of the applicable licensor, to these trademarks.

							2

Table of Contents
	PART I. FINANCIAL INFORMATION
	Item 1. Consolidated Financial Statements
		Tucows Inc.
	Consolidated Balance Sheets

	(Dollar amounts in thousands of U.S. dollars)
		(unaudited)

				June 30,		December 31,
				2020		2019

Assets

Current assets:
Cash and cash equivalents			$		8,859 $		20,393
Accounts receivable, net of allowance for doubtful accounts of $214 as of June 30, 2020 and $131 as of December31, 2019
					7,506		14,564
Inventory					965		3,457
Prepaid expenses and deposits					16,549		13,478
Derivative instrument asset, current portion (note 5)					1,080		731
Prepaid domain name registry and ancillary services fees, current portion (note 12)					96,322		91,252
Assets held-for-sale (note 9)					9,027		-
Income taxes recoverable					1,326		1,800
Total current assets								141,634	145,675

Prepaid domain name registry and ancillary services fees, long-term portion (note 12)					17,902		17,915
Derivative instrument asset, long-term portion (note 5)					611		-
Deferred tax asset					340		-
Property and equipment								101,292	82,121
Right of use operating lease asset					11,066		11,335
Contract costs					344		1,400
Intangible assets (note 6)					52,732		57,654
Goodwill (note 6)								116,270	109,818
Total assets			$					442,191 $	425,918


Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable			$		6,511 $		6,671
Accrued liabilities					9,915		9,373
Customer deposits					14,468		14,074
Derivative instrument liability, current portion (note 5)					561		-
Liabilities held-for-sale (note 9)					751		-
Operating lease liability, current portion (note 13)					1,506		1,413
Deferred revenue, current portion (note 11)								129,072	123,101
Accreditation fees payable, current portion					1,018		952
Income taxes payable					1,291		1,324
Total current liabilities								165,093	156,908

Derivative instrument liability, long-term portion (note 5)					158		-
Deferred revenue, long-term portion (note 11)					26,228		26,202
Accreditation fees payable, long-term portion					204		216
Operating lease liability, long-term portion (note 13)					9,169		9,424
Loan payable, long-term portion (note 7)								113,608	113,503
Other long-term liability (note 4 (b))					3,244		-
Deferred tax liability					27,113		25,471

Stockholders' equity (note 15)
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding					-		-
Common stock - no par value, 250,000,000 shares authorized; 10,570,360 shares issued and outstanding as of June
30, 2020 and 10,585,159 shares issued and outstanding as of December 31, 2019					18,865		16,633
Additional paid-in capital					591		880
Retained earnings					77,322		76,208
Accumulated other comprehensive income (loss) (note 5)					596		473
Total stockholders' equity					97,374		94,194
Total liabilities and stockholders' equity			$					442,191 $	425,918

Contingencies (note 18)

Subsequent events (note 19)

										See accompanying notes to consolidated financial statements

		3

Table of Contents
	Tucows Inc.
		Consolidated Statements of Operations and Comprehensive Income

		(Dollar amounts in thousands of U.S. dollars, except per share amounts)
	(unaudited)

			For the Three Months Ended June
				30,		For the Six Months Ended June 30,
						2020				2019		2020	2019


Net revenues (note 11)			$	82,122 $	84,117 $			166,107	$	163,070

Cost of revenues (note 11)
Cost of revenues				51,790	54,873			104,978		106,805
Network expenses				2,485	2,385			4,901		4,780
Depreciation of property and equipment				3,030	2,038			5,907		3,839
Amortization of intangible assets (note 6)				326	314			680			488
Impairment of property and equipment				1,525	-			1,525			-
Total cost of revenues				59,156	59,610			117,991		115,912

Gross profit				22,966	24,507			48,116		47,158

Expenses:
Sales and marketing				9,218	8,856			18,203		17,597
Technical operations and development				3,067	2,752			5,818		5,275
General and administrative				5,465	4,796			10,206		9,244
Depreciation of property and equipment				125	134			238			258
Amortization of intangible assets (note 6)				2,504	2,251			5,451		4,117
Impairment of definite life intangible assets (note 6)				1,431	-			1,431			-
Loss (gain) on currency forward contracts (note 5)				(381)	(31)			60			(110)
Total expenses				21,429	18,758			41,407		36,381

Income from operations				1,537	5,749			6,709		10,777

Other income (expenses):
Interest expense, net				(846)	(1,314)			(1,996)		(2,286)
Other expense, net				(85)	-			(172)			-
Total other income (expenses)				(931)	(1,314)			(2,168)		(2,286)

Income before provision for income taxes				606	4,435			4,541		8,491

Provision for income taxes (note 8)				449	1,819			1,550		3,076

Net income for the period				157	2,616			2,991		5,415

Other comprehensive income, net of tax
Unrealized income (loss) on hedging activities (note 5)				1,114	240			(120)			789
Net amount reclassified to earnings (note 5)				200	80			243			141
Other comprehensive income net of tax expense of $398 and $103 for the three monthsended June 30, 2020 and June 30, 2019, $32 and $298 for the six months ended June 30,2020 and June 30, 2019 (note 5)
				1,314	320			123			930

Comprehensive income, net of tax for the period			$	1,471 $	2,936 $			3,114	$	6,345


Basic earnings per common share (note 10)			$	0.01 $	0.25 $			0.28	$		0.51

Shares used in computing basic earnings per common share (note 10)						10,567,382	10,657,124	10,589,806		10,646,045

Diluted earnings per common share (note 10)			$	0.01 $	0.24 $			0.28	$		0.50

Shares used in computing diluted earnings per common share (note 10)						10,653,527	10,840,005	10,684,304		10,837,456
		See accompanying notes to consolidated financial statements

	4

Table of Contents
	Tucows Inc.
		Consolidated Statements of Cash Flows

		(Dollar amounts in thousands of U.S. dollars)
	(unaudited)

			For the Three Months Ended June 30, For the Six Months Ended June 30,
				2020		2019		2020		2019
Cash provided by:
Operating activities:
Net income for the period			$		157	$	2,616 $		2,991 $		5,415
Items not involving cash:
Depreciation of property and equipment				3,155		2,172		6,145		4,097
Impairment of property and equipment				1,525			-	1,525			22
Amortization of debt discount and issuance costs					67			90		134		168
Amortization of intangible assets				2,830		2,565		6,131		4,605
Net amortization contract costs					95			34		124		53
Impairment of definite life intangible assets				1,431			-	1,431			-
Accretion of contingent consideration					85			-		172		-
Other					223			-		223		-
Deferred income taxes (recovery)					(917)		1,449		(1,107)		1,911
Excess tax benefits on share-based compensation expense					(164)			(381)		(344)		(737)
Net Right of use operating assets/Operating lease liability					291			79		112		49
Loss on disposal of domain names					2			2		15		6
Loss (gain) on change in the fair value of forward contracts					(436)			(70)		(88)		(188)
Stock-based compensation					847			685	1,648		1,210
Change in non-cash operating working capital:
Accounts receivable					401		1,031		2,552			(157)
Inventory					900			108	1,804			516
Prepaid expenses and deposits				(3,247)		(2,524)		(3,222)		(2,914)
Prepaid domain name registry and ancillary services fees				(2,204)		1,651		(5,057)			(65)
Income taxes recoverable					294		(1,639)			794	(2,875)
Accounts payable				(1,521)		(1,170)			250		(384)
Accrued liabilities				2,165		2,266			334	3,587
Customer deposits					336			(808)		394		(521)
Deferred revenue				2,655		(1,131)		5,997		2,138
Accreditation fees payable					(31)			(46)		54		34
Net cash provided by operating activities				8,939		6,979		23,012		15,970

Financing activities:
Proceeds received on exercise of stock options					29			122		46		194
Payment of tax obligations resulting from net exercise of stock options					(165)			(185)		(347)		(524)
Repurchase of common stock					(164)			-	(3,281)			-
Proceeds received on loan payable					-		7,431			-	40,371
Repayment of loan payable					-			(3)		-	(4,603)
Payment of loan payable costs					(7)			(434)		(32)		(641)
Net cash (used in) provided by financing activities					(307)		6,931		(3,614)		34,797

Investing activities:
Additions to property and equipment				(12,150)		(10,414)		(22,093)		(20,849)
Acquisition of other assets					-		(2,501)			-	(2,501)
Acquisition of Cedar Holdings Group, net of cash of $66 (note 4(b))					-			-	(8,770)			-
Acquisition of Ascio Technologies, net of cash of $1 (note 4(a))					-			-		-	(28,024)
Acquisition of intangible assets					(69)			(27)		(69)		(27)
Net cash used in investing activities				(12,219)		(12,942)		(30,932)		(51,401)

Increase (decrease) in cash and cash equivalents				(3,587)			968	(11,534)			(634)

Cash and cash equivalents, beginning of period				12,446		11,035		20,393		12,637
Cash and cash equivalents, end of period			$	8,859 $		12,003 $		8,859 $		12,003



Supplemental cash flow information:
Interest paid			$		686	$	1,318 $		1,840 $		2,294
Income taxes paid, net			$	1,243	$	2,046 $		2,200 $		4,164
Supplementary disclosure of non-cash investing and financing activities:
Property and equipment acquired during the period not yet paid for			$		635	$		674 $		635 $		674
Fair value of shares issued for acquisition of Cedar Holdings Group			$		-	$		- $	2,000 $			-
Fair value of contingent consideration for acquisition of Cedar Holdings Group			$		7	$		- $	3,072 $			-

												See accompanying notes to consolidated financial statements

	5

Table of Contents NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) 1. Organization of the Company:
	Tucows Inc. (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions) provides simple useful services that
help people unlock the power of the Internet. The Company provides US consumers and small businesses with mobile phone services nationally and high-speed fixedInternet access in selected towns. The Company is also a global distributor of Internet services, including domain name registration, digital certificates, and email. Itprovides these services primarily through a global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers ofInternet services to end-users.

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 financialposition of Tucows and its subsidiaries as at June 30, 2020 and the results of operations and cash flows for the interim periods ended June 30, 2020 and 2019. The resultsof 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 auditedconsolidated financial statements and accompanying notes have been condensed or omitted. Other than the exception noted below, these interim consolidated financialstatements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read inconjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in Tucows' 2019 AnnualReport on Form 10-K filed with the SEC on March 4, 2020 (the “2019 Annual Report”). There have been no material changes to our significant accounting policies andestimates during the three and six months ended June 30, 2020 as compared to the significant accounting policies and estimates described in our 2019 Annual Report,except as described in Note 3 – Recent Accounting Pronouncements, and Note 9 - Assets Held-for-sale.

3. Recent Accounting Pronouncements: Recent Accounting Pronouncements Adopted
	In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use
Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2018-15”). ASU 2018-15 helps entities evaluate theaccounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance on accounting for implementation costs whenthe cloud computing arrangement does not include a license and is accounted for as a service contract. The amendments in ASU 2018-15 require an entity (customer) ina hosting arrangement to assess which implementation costs to capitalize vs expense as it relates to a service contract. The amendments also require the entity(customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. ASU 2018-15is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2018-15 in the first quarter of2020 to all implementation costs incurred after the date of adoption. The new guidance did not have a material impact on our consolidated financial statements.
		6

Table of Contents Recent Accounting Pronouncements Not Yet Adopted
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
(“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden of reference rate reform on financial reporting. Theamendments in ASU 2020-04 apply to contract modifications that replace a reference rate affected by reference rate reform and contemporaneous modifications of othercontract terms related to the replacement of the reference rate. The following optional expedients for applying the requirements of certain Topics or Industry Subtopicsin the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance:

	1.	Modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effectiveinterest rate.
2.	Modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments ofthe lease classification and the discount rate or remeasurements of lease payments that otherwise would be required under those Topics for modifications notaccounted for as separate contracts.

3.	Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that isclearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging— EmbeddedDerivatives


	The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently charged interest and
standby fees associated with its Amended 2019 Credit Facility (as defined below) based on LIBOR, which will need to be amended when an alternative reference rate ischosen, at which time we may adopt some of the practical expedients provided by ASU 2020-04.

4. Acquisitions:
(a) Ascio

	On March 18, 2019, the Company entered into an Asset Purchase Agreement to purchase all of the equity of Ascio Technologies, Inc. (“Ascio”), a domain
registrar business, and all of CSC’s assets related to that business. For more information, see Note 3 - Acquisitions of the 2019 Annual Report.
(b) Cedar

	In the fourth quarter of 2019, the Company entered into a Stock Purchase Agreement to purchase all of the issued and outstanding shares of Cedar Holdings
Group, Incorporated (“Cedar”), a fiber Internet provider business based in Durango, Colorado. The transaction closed on January 1, 2020, following receipt of allregulatory approvals. The purchase price was $14.1 million, less an estimated purchase price adjustment of approximately $0.2 million relating to a working capital deficitand assessment of the fair value of contingent consideration, for net purchase consideration of $13.9 million. In addition to $9.0 million cash consideration due atclosing, the Company also issued 32,374 ($2.0 million) of Tucows Inc. shares with a two-year restriction period at closing. Included in the agreement is contingentconsideration totaling up to $4.0 million, due on the 24th and 36th month anniversaries of the closing of the transaction dependent upon the achievement of certainmilestones as defined in the Share Purchase Agreement. The fair value of the contingent consideration was determined to be $3.1 million using a discount rate of 11.2%.The Company has prepared a preliminary purchase price allocation of the assets acquired and the liabilities assumed of Cedar based on management’s best estimates offair value. The final purchase price allocation may vary based on final appraisals, valuations and analyses of the fair value of the acquired assets and assumedliabilities.
	The amortization period for the customer relationships and network rights are 7 and 15 years, respectively.

		7

Table of Contents
	The following table shows the preliminary allocation of the purchase price for Cedar to the acquired identifiable assets and liabilities assumed (thousands of U.S.
dollars): Cash Consideration, including working capital adjustment
		$	8,836
Share-based payment			2,000
Fair value of contingent payments			3,072
Total estimated purchase price			13,908

Cash and Cash Equivalents			66
Accounts Receivables, net			47
Other current assets			22
Property and equipment			4,661
Right of use operating lease			18
Intangible assets, consisting of customer relationships and network rights			5,390
Total identifiable assets			10,204
Accounts payable and accrued liabilities			(362)
Deferred tax liability			(2,373)
Operating lease liability			(13)
Total liabilities assumed			(2,748)
Total net assets (liabilities) assumed			7,456
Total goodwill		$	6,452

	The goodwill related to this acquisition is primarily attributable to synergies expected to arise from the acquisition and is not deductible for tax purposes.
	In connection with this acquisition, the Company incurred total acquisition related costs of $0.1 million, of which nil were included in General & Administrative
expenses in the consolidated statements of Operations and comprehensive Income for the three and six months ended June 30, 2020.
	The following table presents selected unaudited pro forma information for the Company assuming the acquisition of Cedar had occurred as of January 1, 2019.
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 orwhat results would be for any future periods.
					Unaudited				Unaudited
				For the Three
				Months Ended June	For the Six Months
					30,		Ended June 30,
					2019				2019

Net revenues				$			85,345 $	165,526
Net income							2,740	5,440

Basic earnings per common share					0.26	0.51
Diluted earnings per common share				$	0.25 $	0.50

	The amount of revenue recognized since the acquisition date included in the consolidated statements of operations and comprehensive income statement for the
three and six months ended June 30, 2020 is $1.2 million and $2.4 million, respectively.
	The net income recognized since the acquisition date included in the consolidated statements of operations and comprehensive income for the three and six
months ended June 30, 2020 is a gain of $0.1 million and a loss of $0.2 million, respectively.

								8

Table of Contents 5. Derivative Instruments and Hedging Activities:
	The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are foreign
exchange rate risk and interest rate risk.
	Since October 2012, the Company has employed 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, taxes, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian dollarsand are expected to be paid by its Canadian operating subsidiary. In May 2020, the Company entered into a pay-fixed, receive-variable interest rate swap with a Canadianchartered bank to limit the potential interest rate fluctuations incurred on its future cash flows related to variable interest payments on the Credit facility. The notionalvalue of the interest rate swap was $70 million.
	As part of its risk management strategy, the Company also uses derivative instruments to hedge a portion of the foreign exchange risk and interest rate risk
associated with these costs. The Company does not use these forward contracts for trading or speculative purposes. The foreign exchange contracts typically maturebetween one and eighteen months, and the interest rate swap matures in June 2023.
	The Company has designated certain of these foreign exchange transactions as cash flow hedges of forecasted transactions under ASU 2017-12, Derivatives and
Hedging (Topic 815) (“ASC Topic 815”). For certain contracts, as the critical terms of the hedging instrument, and of the entire hedged forecasted transaction, are thesame, 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 areexpected to completely offset at inception and on an ongoing basis. The Company has also designated the interest rate swap as a cash flow hedge of expected futureinterest payments. Accordingly, for the foreign exchange and interest rate swap contracts, unrealized gains or losses on the effective portion of these contracts havebeen included within other comprehensive income and reclassified to earnings when the hedged transaction is recognized in earnings. Cash flows from hedgingactivities are classified under the same category as the cash flows from the hedged items in the consolidated statements of cash flows. The fair value of the contracts, asof June 30, 2020 and December 31, 2019, is recorded as derivative instrument assets or liabilities. For certain contracts where the hedged transactions are no longerprobable to occur, the loss on the associated forward contract is recognized in earnings.
	As of June 30, 2020, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $52.1 million, of
which $44.2 million met the requirements of ASC Topic 815 and were designated as hedges.
	As of December 31, 2019, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $30.5 million,
of which $26.1 million met the requirements of ASC Topic 815 and were designated as hedges.
	As of June 30, 2020, we had the following outstanding forward contracts to trade U.S. dollars in exchange for Canadian dollars:

				Weighted average
		Notional amount of		exchange rate of U.S.
	Maturity date (Dollar amounts in thousands of U.S. dollars)		U.S. dollars		dollars		Fair value

	July - September 2020			10,656		1.3227		(273)
	October - December 2020			9,658		1.3227		(247)
	January - March 2021			11,124		1.4283		574
	April - June 2021			9,878		1.4283		507
	July - September 2021			10,782		1.4362		611
		$		52,098		1.3888 $		1,172

	As of June 30, 2020, the notional amount of the Company's interest rate swap designated as a cash flow hedge was $70 million. As of December 31, 2019 the
Company had not entered into any interest rate swaps.
		9

Table of Contents 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 June 30,	As of December
				2020 Fair ValueAsset (Liability)	31, 2019 Fair
Derivatives (Dollar amounts in thousands of U.S. dollars)			Balance Sheet Location		Value Asset
Foreign Currency forward contracts designated as cash flow hedges (net)		Derivative instruments		$			982 $	626
Interest rate swap contract designated as a cash flow hedge (net)		Derivative instruments					(200) $	-
Foreign Currency forward contracts not designated as cash flow hedges (net)		Derivative instruments					190	105
Total foreign currency forward contracts (net)		Derivative instruments		$			972 $	731
Movement in accumulated other comprehensive income (AOCI) balance for the three months ended June 30, 2020 (Dollar amounts in thousands of U.S. dollars)
			Gains and losses on
				cash flow hedges						Tax impact			Total AOCI
Opening AOCI balance - March 31, 2020			$					(932) $	214 $	(718)
Other comprehensive income (loss) before reclassifications								1,453	(339)	1,114
Amount reclassified from AOCI								259	(59)	200
Other comprehensive income (loss) for the three months ended June 30, 2020								1,712	(398)	1,314

Ending AOCI Balance - June 30, 2020			$					780 $	(184) $	596
Movement in accumulated other comprehensive income (AOCI) balance for the six months ended June 30, 2020 (Dollar amounts in thousands of U.S. dollars)
			Gains and losses on
				cash flow hedges						Tax impact			Total AOCI
Opening AOCI balance - December 31, 2019			$					625 $	(152) $	473
Other comprehensive income (loss) before reclassifications								(162)	42	(120)
Amount reclassified from AOCI								317	(74)	243
Other comprehensive income (loss) for the six months ended June 30, 2020								155	(32)	123

Ending AOCI Balance - June 30, 2020			$					780 $	(184) $	596
Effects of derivative instruments on income and other comprehensive income (OCI) for the three months ended June 30, 2020 are as follows (Dollar amounts inthousands of U.S. dollars)
									Amount of Gain or	Location of Gain or(Loss) Reclassified	Amount of Gain or
									(Loss) Recognized in	(Loss) Reclassified
									OCI, net of tax, on	from AOCI into	from AOCI into
Derivatives in Cash Flow Hedging Relationship									Derivative		Income	Income
				Operating expenses $		(201)
Foreign currency forward contracts for the three months ended June 30, 2020			$					1,314 Cost of revenues	$	(58)

				Interest expense,net
Interest rate swap contract for the three months ended June 30, 2020			$	-	$	-

				Operating expenses $		(91)
Foreign currency forward contracts for the three months ended June 30, 2019			$					320 Cost of revenues	$	(15)

				Interest expense,net
Interest rate swap contract for the three months ended June 30, 2019			$	-	$	-
Effects of derivative instruments on income and other comprehensive income (OCI) for the six months ended June 30, 2020 are as follows (Dollar amounts inthousands of U.S. dollars)
									Amount of Gain or	Location of Gain or(Loss) Reclassified	Amount of Gain or
									(Loss) Recognized in	(Loss) Reclassified
									OCI, net of tax, on	from AOCI into	from AOCI into
Derivatives in Cash Flow Hedging Relationship									Derivative		Income	Income
				Operating expenses $		(246)
Foreign currency forward contracts for the six months ended June 30, 2020			$					123 Cost of revenues	$	(71)

				Interest expense,net
Interest rate swap contract for the six months ended June 30, 2020			$	-	$	-

				Operating expenses $		(154)
Foreign currency forward contracts for the six months ended June 30, 2019			$					930 Cost of revenues	$	(32)

				Interest expense,net
Interest rate swap contract for the six months ended June 30, 2019			$	-	$	-

	In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company recorded the following fair value adjustments on
settled and outstanding contracts (Dollar amounts in thousands of U.S. dollars):

										Three Months Ended	Six Months Ended

		June 30,				June 30,
Forward currency contracts not designated as hedges:		2020		2019		2020		2019

Gain (loss) on settlement	$		(55) $		(39) $		(148) $		(78)

Gain (loss) on change in fair value	$		436 $		70 $		88 $		188

										10

Table of Contents 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 $116.3 million as of June 30, 2020 and $109.8 million as of December 31, 2019. The Company's goodwill relates
93% ($107.7 million) to its Domain Services operating segment and 7% ($8.6 million) to its Network Access Services operating segment.
	Goodwill is not amortized, but is subject to an annual impairment test, or more frequently if impairment indicators are present. No impairment was recognized
during the three and six months ended June 30, 2020 and 2019.

Other Intangible Assets:
	Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The
Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company hasthe exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. Theindefinite life intangible assets are not amortized but are subject to impairment assessments performed throughout the year. As part of the normal renewal evaluationprocess during the periods ended June 30, 2020 and June 30, 2019, the Company assessed that certain domain names that were originally acquired in the June 2006acquisition of Mailbank.com Inc. that were up for renewal, should not be renewed.
	Intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods of two to
fifteen years.
	In June 2020, in light of developments in the economy and the business and leisure travel industries as a result of the novel strain of coronavirus (“COVID-19”)
pandemic, the Company decided to discontinue the operation of Roam Mobility. As a consequence of the decision to shut down its Roam Mobility operations, theCompany has recorded an impairment loss associated with Roam Mobility customer relationships of $1.4 million, as at June 30, 2020.
	In June 2020, the Company committed to a plan to sell its Ting Mobile customer base and reclassified its mobile customer relationships totaling $2.6 million as
held-for-sale assets (Note 9). See Note 19 - Subsequent Events for more information on the Company’s sale of its Ting Mobile customer base.
	Throughout the second quarter of 2020, the Company purchased several non-exclusive land easements, totaling $0.1 million, which are necessary for the
Company to install fiber internet infrastructure in conjunction with its Fiber Internet business.
	Acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):
				Direct
		Surname	navigation
		domain		domain			Customer	Network
			names		names		Brand		relationships Technology	rights	Total
		indefinite	indefinite
Amortization period											life		life		7 years		3 - 7 years	2 - 7 years	15 years

Balances, March 31, 2020		$	11,162 $	1,135 $		8,573 $							36,469 $	1,189 $	1,387 $		59,915
Cedar Networks acquisition (Note 4 (b))			-		-		-						10	-	(195)	(185)
Additions to/(disposals from) domain portfolio,net
			(2)		-		-					-	-	-		(2)
Impairment of definite life intangible asset			-		-		-						(1,431)	-	-	(1,431)
Other			-		-		-						(223)	-	-	(223)
Classified as assets held for-sale			-		-		-						(2,581)	-	-	(2,581)
Acquisition of Network rights														69		69
Amortization expense			-		-	(517)							(1,987)	(305)	(21)	(2,830)
Balances, June 30, 2020		$	11,160 $	1,135 $		8,056 $							30,257 $	884 $	1,240 $		52,732

				Direct
		Surname	navigation
		domain		domain			Customer	Network
			names		names		Brand		relationships Technology	rights	Total
		indefinite	indefinite
Amortization period											life		life		7 years		3 - 7 years	2 - 7 years	15 years

Balances, December 31, 2019		$	11,166 $	1,144 $		9,091 $							34,268 $	1,516 $	469 $	57,654
Cedar Networks acquisition (Note 4 (b))			-		-		-						4,640	-	750	5,390
Additions to/(disposals from) domain portfolio,
net			(6)		(9)		-					-	-	-	(15)
Impairment of definite life intangible asset			-		-		-						(1,431)	-	-	(1,431)
Other			-		-		-						(223)	-	-	(223)
Classifed as assets held for-sale			-		-		-						(2,581)	-	-	(2,581)
Acquisition of Network rights			-		-		-					-	-	69		69
Amortization expense			-		-	(1,035)							(4,416)	(632)	(48)	(6,131)
Balances, June 30, 2020		$	11,160 $	1,135 $		8,056 $							30,257 $	884 $	1,240 $		52,732
	The following table shows the estimated amortization expense for each of the next 5 years, assuming no further additions to acquired intangible assets are made
(Dollar amounts in thousands of U.S. dollars):

									Year ending
									December 31,

Remainder of 2020	$	5,202
2021		11,783
2022		10,839
2023		8,811
2024		2,399
Thereafter		1,403
Total	$	40,437

			11

Table of Contents 7. Loan Payable:
Amended 2019 Credit Facility

	On June 14, 2019, the Company and its wholly-owned subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc., Tucows (Delaware) Inc. and Tucows (Emerald),
LLC entered into an Amended and Restated Senior Secured Credit Agreement with Royal Bank of Canada (“RBC”), as administrative agent, and lenders party thereto(collectively with RBC, the “Lenders”) under which the Company has access to an aggregate of up to $240 million in funds, which consists of $180 million guaranteedcredit facility and a $60 million accordion facility. The Amended 2019 Credit Facility replaced the Company’s 2017 Amended Credit Facility. On November 27, 2019, theCompany entered into Amending Agreement No. 1 to the Amended and Restated Senior Secured Credit Agreement (collectively with the Amended and Restated SeniorSecured Credit Agreement, the “Amended 2019 Credit Facility”) to amend certain defined terms in connection with the Cedar acquisition.
	The Amended 2019 Credit Facility replaced a secured Credit Agreement dated January 20, 2017 with Bank of Montreal, RBC and Bank of Nova Scotia (as
amended, the “2017 Amended Credit Facility”).
	In connection with the Amended 2019 Credit Facility, the Company incurred $0.4 million of fees paid to lenders are 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 and $0.1 million have been recorded inGeneral and administrative expenses.
	The obligations of the Company under the Amended 2019 Credit Agreement are secured by a first priority lien on substantially all of the personal property and
assets of the Company and has a four-year term, maturing on June 13, 2023.
Credit Facility Terms

	The Amended 2019 Credit Facility is revolving with interest only payments with no scheduled repayments during the term.

	The Amended 2019 Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The Amended
2019 Credit Facility requires that the Company to comply with the following financial covenants: (i) at all times, a Total Funded Debt to Adjusted EBITDA Ratio (asdefined in the Amended 2019 Credit Agreement) of 3.50:1; and (ii) with respect to each fiscal quarter, an Interest Coverage Ratio (as defined in the Amended 2019 CreditAgreement) of not less than 3.00:1. Further, the Company’s maximum annual Capital Expenditures cannot exceed 110% of the forecasted capital expenditures of its annualbusiness plan. In addition, share repurchases require the Lenders’ consent if the Company’s Total Funded Debt to Adjusted EBITDA ratio exceeds 2.00:1. During thethree and six months ended June 30, 2020, the Company was in compliance with these covenants.

	Borrowings under the Amended 2019 Credit Facility will accrue interest and standby fees based on the Company’s Total Funded Debt to Adjusted EBITDA ratio
and the availment type as follows:
			If Total Funded Debt to EBITDA is:
			Greater than or	Greater than or
			equal to 1.00 and	equal to 2.00 and	Greater than or
Availment type or fee		Less than 1.00	less than 2.00		less than 2.50		equal to 2.50
Canadian dollar borrowings based on Bankers’ Acceptance or U.S. dollarborrowings based on LIBOR (Margin)
						1.50%	1.85%	2.35%	2.85%
Canadian or U.S. dollar borrowings based on Prime Rate or U.S. dollar borrowingsbased on Base Rate (Margin)
						0.25%	0.60%	1.10%	1.60%
Standby fees						0.30%	0.37%	0.47%	0.57%

		12

Table of Contents
	The following table summarizes the Company’s borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars):
			June 30, 2020		December 31, 2019

Revolver		$			114,400 $	114,400
Less: unamortized debt discount and issuance costs			(792)	(897)
Total loan payable					113,608	113,503
Less: loan payable, current portion			-	-
Loan payable, long-term portion		$			113,608 $	113,503
	The following table summarizes our scheduled principal repayments as of June 30, 2020 (Dollar amounts in thousands of U.S. dollars):
Remainder of 2020			$	-
2021				-
2022				-
2023						114,400
			$			114,400
Other Credit Facilities
	Prior to the Company entering into the Amended 2019 Credit Facility and the 2017 Amended Credit Facility, the Company had credit agreements (collectively the
“Prior Credit Facilities”) with BMO, which provided the Company with access to a treasury risk management facility and a credit card facility. All remaining creditfacilities under the 2017 Amended Credit Facility and the Prior Credit Facilities have been terminated.

8. Income Taxes:
	For the three months ended June 30, 2020, we recorded an income tax expense of $0.4 million on income before income taxes of $0.6 million, using an estimated
effective tax rate for the fiscal year ending December 31, 2020 (“Fiscal 2020”) adjusted for certain minimum state taxes as well as the inclusion of a $0.1 million taxrecovery related to ASU No. 2016-09—Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“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. Our effective taxrate for the three months ended June 30, 2020 is also adversely affected by discrete losses of $3.7 million related to the impairment of Ting TV and Roam Mobility assets,the tax benefit of which has only been partially recognized.
	Comparatively, for the three months ended June 30, 2019, the Company recorded an income tax expense of $1.8 million on income before taxes of $4.4 million,
using an estimated effective tax rate for the 2019 fiscal year and adjusted for the $0.3 million tax recovery impact related to ASU 2016-09.

For the six months ended June 30, 2020, we recorded an income tax expense of $1.6 million on net income before income taxes of $4.5 million, using an estimated
effective tax rate for Fiscal 2020 adjusted for certain minimum state taxes, as well as the inclusion of a $0.2 million tax recovery related to ASU No. 2016-09—Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”), which requires all excess taxbenefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense. Our effective tax rate for the six months endedJune 30, 2020 is also adversely affected by discrete losses of $3.7 million related to the impairment of Ting TV and Roam Mobility assets, the tax benefit of which hasonly been partially recognized.
Comparatively, for the six months ended June 30, 2019, the Company recorded an income tax expense of $3.1 million on income before taxes of $8.5 million, using
an estimated effective tax rate for the 2019 fiscal year and adjusted for the $0.7 million tax recovery impact related to ASU 2016-09.

	In assessing the realizability of deferred tax assets, management 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 temporarydifferences become deductible. Management considers projected future taxable income, uncertainties related to the industry in which the Company operates, and taxplanning strategies in making this assessment.

In connection with the eNom acquisition in 2017, we acquired deferred tax liabilities primarily composed of prepaid registry fees. As a result, we aligned our tax
methodology pertaining to the deductibility of prepaid registry fees for our other subsidiaries. In the first quarter of 2019, we determined that we were in technicalviolation with respect to the administrative application of the accounting method change relating to the deductibility of prepaid registry fees for these additionalsubsidiaries. In February 2019, the Company filed an application for relief ("9100 Relief") to correct the issue. In November 2019, the Company was granted 9100 Reliefand was given 30 days to file the appropriate forms based on prescribed instructions. The Company filed the forms in December 2019 and now awaits the final IRSresponse and acceptance of the change in accounting method. Management is of the view that it is more likely than not that the IRS will accept the 9100 Relief andfiling of the prescribed forms. As such, no additional tax uncertainties or related interest or penalties have been recorded as at June 30, 2020.

	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 June 30, 2020 and December 31, 2019, respectively.

		13

Table of Contents 9. Assets and liabilities held-for-sale:
Accounting Policy:
When the Company initiates the sale of long-lived assets, it assesses whether the assets meet the criteria to be considered assets held-for-sale. The review is
based on whether the following criteria are met:
- Management and the Company's board of directors have committed to a plan to sell the asset; - The subject assets are available for immediate sale in their present condition; - The Company is actively locating buyers as well as other initiatives required to complete the sale; - The sale is probable and the transfer is expected to qualify for recognition as a complete sale in one year; - The long-lived asset is being actively marketed for sale at a price that is reasonable in relation to fair value; and - Actions necessary to complete the plan indicate it is unlikely significant changes will be made to the plan or the plan will be withdrawn.
Description of asset groups held-for-sale:
If all the criteria are met, a long-lived asset or liabilities held for sale is measured at the lower of its carrying amount or fair value less cost to sell, and the
Company will cease recording depreciation. Any adjustment to the carrying amount is recorded as an impairment loss.

	In June 2020, the Company committed to a plan to sell the Ting Mobile customer base and the Company's mobile inventory. Accordingly, any capitalized costs
associated with the Ting Mobile customer base have been presented as a disposal group held for sale at June 30, 2020. The sale of Tucows' mobile customer base wascompleted on August 1, 2020 pursuant to an asset sale transaction with Dish Wireless L.L.C. (“DISH”). See Note 19 - Subsequent Events for more information on thedetails on the transaction with DISH.
	As at June 30, 2020 the disposal group comprised assets of $9.0 million and liabilities of $0.8 million comprised of the following assets and liabilities:

			June 30, 2020

Device credits		$	99
Accounts receivable			4,554
Mobile inventory			861
Capitalized contract costs (net)			932
Customer relationship intangible assets (net)			2,581
Assets held for sale		$	9,027


Accounts payable		$	594
Accrued liabilities			157
Liabilities held for sale		$	751
	No impairment loss was recorded in the consolidated statements of operations and comprehensive income as a result of classifying the aforementioned assets as
held for sale during the three and six months ended June 30, 2020.
10. Basic and Diluted Earnings per Common Share:
	The following table reconciles the numerators and denominators of the basic and diluted earnings per common share computation (Dollar amounts in thousands
of US dollars, except for share data):

					Three Months Ended June 30,	Six Months Ended June 30,
						2020		2019		2020		2019

Numerator for basic and diluted earnings per common share:
Net income for the period				$			157 $	2,616 $	2,991 $	5,415

Denominator for basic and diluted earnings per common share:
Basic weighted average number of common shares outstanding						10,567,382		10,657,124	10,589,806		10,646,045
Effect of outstanding stock options						86,145		182,881	94,498		191,411
Diluted weighted average number of shares outstanding						10,653,527		10,840,005	10,684,304		10,837,456

Basic earnings per common share				$			0.01 $	0.25 $	0.28 $	0.51

Diluted earnings per common share				$			0.01 $	0.24 $	0.28 $	0.50

	For the three months ended June 30, 2020, options to purchase 734,388 common shares were not included in the computation of diluted income per common share
because the options’ exercise price was greater than the average market price of the common shares for the period as compared to the three months ended June 30, 2019,where 260,700 outstanding options were not included in the computation.
	For the six months ended June 30, 2020, options to purchase 734,388 common shares were not included in the computation of diluted income per common share
because the options’ exercise price was greater than the average market price of the common shares for the period as compared to the six months ended June 30, 2019,where 260,700 outstanding options were not included in the computation.11. Revenue:

Significant accounting policy
	The Company’s revenues are derived from (a) the provisioning of mobile and fiber Internet services; and from (b) domain name registration contracts, other
domain related value-added services, domain sale contracts, and other advertising revenue. Amounts received in advance of meeting the revenue recognition criteriadescribed below are recorded as deferred revenue. All products are generally sold without the right of return or refund.
	Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third
parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Nature of goods and services
	The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed
information about reportable segments, see Note 14 – Segment Reporting.
(a) Network Access Services

	The Company generates Network Access Services revenues primarily through the provisioning of mobile services, Ting Mobile. Other sources of revenue
include the provisioning of fixed high-speed Internet access, Ting Internet, as well as billing solutions to Internet Service Providers (“ISPs”).
	Ting Mobile wireless usage contracts grant customers access to standard talk, text and data mobile services. Ting Mobile contracts are billed based on the actual
amount of monthly services utilized by each customer during their billing cycle and charged to customers on a postpaid basis. Voice minutes, text messages andmegabytes of data are each billed separately based on a tiered pricing program. The Company recognizes revenue for Ting Mobile usage based on the actual amount ofmonthly services utilized by each customer.

		14

Table of Contents
	Ting Internet contracts provide customers Internet access at their home or business through the installation and use of our fiber optic network. Ting Internet
contracts are generally prepaid and grant customers with unlimited bandwidth based on a fixed price per month basis. Because consideration is collected before theservice period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access. Though the Company does not considerthe installation of fixed Internet access to be a distinct performance obligation, the fees related to installation are immaterial and therefore revenue is recognized as billed.
	Both Ting Mobile and Ting Internet access services are primarily contracted through the Ting website, for one month at a time and contain no commitment to
renew the contract following each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Mobile and Ting Internet customers is computed based onthe customer’s activation date. In order to recognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed fromthe end of each billing cycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories and Internethardware to subscribers are recognized when title and risk of loss is transferred to the subscriber and shipment has occurred. Incentive marketing credits given tocustomers are recorded as a reduction of revenue.
	Our Roam Mobility brands also offers standard talk, text and data mobile services. Roam customers prepay for their usage through the Roam Mobility website.
When prepayments are received the amount is deferred, and subsequently recognized as the Company satisfies its obligation to provide mobile services. In addition,revenues associated with the sale of SIM cards are recognized when title and risk of loss is transferred to the subscriber and shipment has occurred. Incentive marketingcredits given to customers are recorded as a reduction of revenue.
	In those cases, where payment is not received at the time of sale, revenue is not recognized at contract inception unless the collection of the related accounts
receivable is reasonably assured. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues at the timeof the sale based on historical experiences and current expectations.
(b) Domain Services

	Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive right
to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewedand transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Thoughfees are collected upfront, revenue from domain registrations are recognized rateably over the registration period as domain registration contracts contain a ‘right toaccess’ license of IP, which is a distinct performance obligation measured over time. The registration period begins once the Company has confirmed that the requesteddomain name has been appropriately recorded in the registry under contractual performance standards.
	Domain related value-added services like digital certifications, WHOIS privacy, website hosting and hosted email provide our resellers and retail registrant
customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinctperformance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-addedservices are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of theperformance obligations.
	The Company is an ICANN accredited registrar. Thus, the Company is the primary obligor with our reseller and retail registrant customers and is responsible for
the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retailregistrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to thosecustomers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.
	The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. Revenue generated from
sale of domain name contracts, containing a distinct performance obligation to transfer the domain name rights under the Company’s control, is generally recognizedonce the rights have been transferred and payment has been received in full.
	Advertising revenue is derived through domain parking monetization, whereby the Company contracts with third-party Internet advertising publishers to direct
web traffic from the Company’s domain expiry stream domains and Internet portfolio domains to advertising websites. Compensation from Internet advertisingpublishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variableconsideration is calculated and paid on a monthly basis, no estimation of variable consideration is required.

		15

Table of Contents Disaggregation of Revenue
	The following is a summary of the Company’s revenue earned from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):

			Three Months Ended June 30,	Six Months Ended June 30,
					2020		2019		2020				2019

Network Access Services:
Mobile Services		$			17,567 $	20,986 $	37,715 $	41,795
Other Services					4,414	2,644				8,722	5,087
Total Network Access Services					21,981	23,630	46,437	46,882

Domain Services:
Wholesale
Domain Services					46,206	46,485	92,169	89,076
Value Added Services					5,034	4,775				9,741	8,959
Total Wholesale					51,240	51,260	101,910	98,035

Retail					8,567	8,783	17,017	17,425
Portfolio						334	444				743	728
Total Domain Services					60,141	60,487	119,670				116,188

		$			82,122 $	84,117 $	166,107 $				163,070

	During the three and six months ended June 30, 2020 and the three and six months ended June 30, 2019 no customer accounted for more than 10% of total revenue
and no customer accounted for more than 10% of accounts receivable.
	The following is a summary of the Company’s cost of revenue from each significant revenue stream (Dollar amounts in thousands of U.S. dollars):
			Three Months Ended June 30,	Six Months Ended June 30,
					2020		2019		2020				2019

Network Access Services:
Mobile Services		$			8,660 $	10,806 $	18,517 $	21,549
Other Services					1,665	956				3,381	2,025
Total Network Access Services					10,325	11,762	21,898	23,574

Domain Services:
Wholesale
Domain Services					36,354	37,817	72,823	72,656
Value Added Services						762	738				1,547	1,531
Total Wholesale					37,116	38,555	74,370	74,187

Retail					4,219	4,409				8,453	8,768
Portfolio						130	147				257	276
Total Domain Services					41,465	43,111	83,080	83,231

Network Expenses:
Network, other costs					2,485	2,385				4,901	4,780
Network, depreciation and amortization costs					3,356	2,352				6,587	4,327
Network, impairment					1,525	-				1,525	-
Total Network Expenses					7,366	4,737	13,013	9,107

		$			59,156 $	59,610 $	117,991 $				115,912


		16

Table of Contents Contract Balances
	The following table provides information about contract liabilities (deferred revenue) from contracts with customers. The Company accounts for contract assets
and liabilities on a contract-by-contract basis, with each contract presented as either a net contract asset or a net contract liability accordingly.
	Given that Company’s long-term contracts with customers are billed in advance of service, the Company’s contract liabilities relate to amounts recorded as
deferred revenues. The Company does not have material streams of contracted revenue that have not been billed.
	Deferred revenue primarily relates to the portion of the transaction price received in advance related to the unexpired term of domain name registrations and other
domain related value-added services, on both a wholesale and retail basis, net of external commissions.
	Significant changes in deferred revenue for the six months ended June 30, 2020 were as follows (Dollar amounts in thousands of U.S. dollars):

			June 30, 2020

Balance, beginning of period		$		149,303
Deferred revenue				120,647
Recognized revenue				(114,650)
Balance, end of period		$		155,300
Remaining Performance Obligations:
	For mobile and internet access services, where the performance obligation is part of contracts that have an original expected duration of one year or less
(typically one month), the Company has elected to apply a practical expedient to not disclose revenues expected to be recognized in the future related performanceobligations that are unsatisfied (or partially unsatisfied) (Dollar amounts in thousands of US dollars).
	Although domain registration contracts are deferred over the lives of the individual contracts, which can range from one to ten years, approximately 80 percent of
our deferred revenue balance related to domain contracts is expected to be recognized within the next twelve months.
	Deferred revenue related to Exact hosting contracts is also deferred over the lives of the individual contracts, which are expected to be fully recognized within the
next twelve months. In connection with the shutdown of the Roam Mobility operations, all previously deferred revenue associated with the Roam Mobility operationshas been recognized as of June 30, 2020. 12. Costs to obtain and fulfill a Contract Deferred costs of fulfillment
	Deferred costs to fulfill contracts generally consist of domain registration costs which have been paid to a domain registry, and are capitalized as Prepaid domain
name registry and ancillary services fees. These costs are deferred and amortized over the life of the domain which generally ranges from one to ten years. For the sixmonths ended June 30, 2020, the Company capitalized $88.2 million and also amortized $83.1 million of contract costs. There was no impairment loss recognized inrelation to the costs capitalized during the six months ended June 30, 2020. Amortization expense of deferred costs is primarily included in cost of revenue. Thebreakdown of the movement in the prepaid domain name registry and ancillary services fees balance for the six months ended June 30, 2020 is as follows (Dollar amountsin thousands of U.S. dollars).
			June 30, 2020

Balance, beginning of period		$		109,167
Deferral of costs			88,194
Recognized costs				(83,137)
Balance, end of period		$		114,224

					17

Table of Contents 13. Leases
	We lease datacenters, corporate offices and fiber-optic cables under operating leases. The Company does not have any leases classified as finance leases. Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may
include options to terminate the leases within 1 year.
	The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):

		For the three	For the three	For the six	For the six
			months ended	months ended	months ended	months ended
		June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Operating Lease Cost (leases with a total term greater than 12 months)		$				527 $	826 $	1,074 $	1,897
Short-term Lease Cost (leases with a total term of 12 months or less)						130	279	374	403
Variable Lease Cost						145	193	273	364
Total Lease Cost		$				802 $	1,298 $	1,721 $	2,664

	Lease Cost is presented in general and administrative expenses and network expenses within our consolidated statements of operations and comprehensive
income.
	Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):

		For the three	For the three	For the six	For the six
			months ended	months ended	months ended	months ended
Supplemental cashflow information:		June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
Operating Lease - Operating Cash Flows (Fixed Payments)		$				429 $	834 $	987 $	1,885
Operating Lease - Operating Cash Flows (Liability Reduction)		$				359 $	703 $	797 $	1,651
New ROU Assets - Operating Leases		$				36 $	41 $	911 $	4,468
Supplemental balance sheet information related to leases:
							June 30, 2020	December 31, 2019
Weighted Average Discount Rate				3.95%					5.20%
Weighted Average Remaining Lease Term				8.51 yrs	8.62 yrs

	Maturity of lease liability as of June 30, 2020 (Dollar amounts in thousands of U.S. dollars):

									June 30, 2020
Remaining of 2020								$	973
2021									1,774
2022									1,695
2023									1,657
2024									1,379
Thereafter									5,068
Total future lease payments									12,546
Less imputed interest									1,871
Total								$	10,675

	Operating lease payments include payments under the non-cancellable term and approximately $0.6 million related to options to extend lease terms that are
reasonably certain of being exercised.

	As of June 30, 2020, we have entered into lease agreements for total payments of $1.1 million that have not yet commenced, and therefore are not included in the
lease liability.
	In March 2020, the Company modified a corporate office lease to defer its April 2020 rent payment to be paid later in four equal installments from September to
December 2020. The modification resulted in an increase to the right of use operating lease asset and right of use operating lease liability of $0.3 million and $0.6 million,respectively, which also included the foreign exchange re-measurement of the right of use asset at the date of modification. Foreign exchange revaluation on both theright of use asset and liability is presented in general and administrative expenses within our consolidated statements of operations and comprehensive income.
	The Company has elected to use the single exchange rate approach when accounting for lease modifications. Under the single exchange rate approach, the entire
right of use asset is revalued at the date of modification in the Company’s functional currency provided the re-measurement is not considered a separate contract or ifthe re-measurement is related to change the lease term or assessment of a lessee option to purchase the underlying asset being exercised.

		18


	14. 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, billing solutions 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 retailInternet 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.

		19

Table of Contents
	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 (i) a key measure of performance for each segment and (ii) 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 themeasurement of segment profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the CEO. The Company followsthe same accounting policies for the segments as those described in Notes 2 – Basis of Presentation, 3 – Recent Accounting Pronouncements, and 11 - Revenue.
	Information by reportable segments (with the exception of disaggregated revenue, which is discussed in Note 11 – Revenue), which is regularly reported to the
chief operating decision maker is as follows (Dollar amounts in thousands of US dollars):
		Network Access
			Services		Domain Services	Consolidated Totals
Three Months Ended June 30, 2020

Net Revenues		$		21,981 $	60,141 $	82,122

Cost of revenues
	Cost of revenues			10,325	41,465	51,790
	Network expenses			605	1,880	2,485
	Depreciation of property and equipment			2,584	446	3,030
	Amortization of intangible assets			21	305	326
	Impairment of Property Plant and Equipment			1,525	-	1,525
Total cost of revenues				15,060	44,096	59,156
Gross Profit				6,921	16,045	22,966

Expenses:
Sales and marketing						9,218
Technical operations and development						3,067
General and administrative						5,465
Depreciation of property and equipment						125
Amortization of intangible assets						2,504
Impairment of definite life intangible assets						1,431
Loss (gain) on currency forward contracts						(381)
Income from operations						1,537
Other income (expenses), net						(931)
Income before provision for income taxes					$	606

		Network Access
			Services		Domain Services	Consolidated Totals
Three Months Ended June 30, 2019

Net Revenues		$		23,630 $	60,487 $	84,117

Cost of revenues
	Cost of revenues			11,762	43,111	54,873
	Network expenses			516	1,869	2,385
	Depreciation of property and equipment			1,656	382	2,038
	Amortization of intangible assets			12	302	314
Total cost of revenues				13,946	45,664	59,610
Gross Profit				9,684	14,823	24,507

Expenses:
Sales and marketing						8,856
Technical operations and development						2,752
General and administrative						4,796
Depreciation of property and equipment						134
Amortization of intangible assets						2,251
Loss (gain) on currency forward contracts						(31)
Income from operations						5,749
Other income (expenses), net						(1,314)
Income before provision for income taxes					$	4,435

		20

Table of Contents
		Network Access
			Services		Domain Services	Consolidated Totals
	Six Months Ended June 30, 2020

	Net Revenues	$		46,437 $			119,670 $	166,107

	Cost of revenues
	Cost of revenues			21,898	83,080			104,978
	Network expenses			1,143	3,758	4,901
	Depreciation of property and equipment			4,998	909	5,907
	Amortization of intangible assets			48	632	680
	Impairment of Property Plant and Equipment			1,525	-	1,525
	Total cost of revenues			29,612	88,379			117,991
	Gross Profit			16,825	31,291	48,116

	Expenses:
	Sales and marketing					18,203
	Technical operations and development					5,818
	General and administrative					10,206
	Depreciation of property and equipment					238
	Amortization of intangible assets					5,451
	Impairment of definite life intangible assets					1,431
	Loss (gain) on currency forward contracts					60
	Income from operations					6,709
	Other income (expenses), net					(2,168)
	Income before provision for income taxes				$	4,541

		Network Access
			Services		Domain Services	Consolidated Totals
	Six Months Ended June 30, 2019

	Net Revenues	$		46,882 $			116,188 $	163,070

	Cost of revenues
	Cost of revenues			23,574	83,231			106,805
	Network expenses			1,038	3,742	4,780
	Depreciation of property and equipment			3,109	730	3,839
	Amortization of intangible assets			23	465	488
	Total cost of revenues			27,744	88,168			115,912
	Gross Profit			19,138	28,020	47,158

	Expenses:
	Sales and marketing					17,597
	Technical operations and development					5,275
	General and administrative					9,244
	Depreciation of property and equipment					258
	Amortization of intangible assets					4,117
	Loss (gain) on currency forward contracts					(110)
	Income from operations					10,777
	Other income (expenses), net					(2,286)
	Income before provision for income taxes				$	8,491

									21

Table of Contents
	(b) The following is a summary of the Company’s property and equipment by geographic region (Dollar amounts in thousands of US dollars):

			June 30, 2020	December 31, 2019

	Canada	$	1,112 $	2,319
	United States				100,137	79,758
	Europe		43	44
		$			101,292 $	82,121

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

			June 30, 2020	December 31, 2019

	Canada	$	2,885 $	5,207
	United States		37,552	40,137
		$	40,437 $	45,344

	(d) The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region (Dollar amounts in thousands of US
dollars):
			June 30, 2020	December 31, 2019

	Canada	$	340 $	-
		$	340 $	-

	(e) Valuation and qualifying accounts (Dollar amounts in thousands of US dollars):

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

	Six Months Ended June 30, 2020						$	131 $	83 $	- $	214
	Twelve months ended December 31, 2019						$	132 $	(1) $	- $	131

						22

Table of Contents 15. Stockholders' Equity: The following table summarizes stockholders' equity transactions for the three-month period ended June 30, 2020 (Dollar amounts in thousands of U.S. dollars):
									Accumulated
					Additional						other		Total
	Common stock				paid in		Retained	comprehensive stockholders'
	Number			Amount		capital		earnings		income (loss)	equity

Balances, March 31, 2020	10,562,774		18,751			-	77,323					(718)	95,356

Exercise of stock options	16,922		120		(91)			-				-	29
Shares deducted from exercise of stock optionsfor payment of withholding taxes and exerciseconsideration
	(5,836)			-	(165)			-				-	(165)
Repurchase and retirement of shares	(3,500)		(6)			-	(158)					-	(164)
Stock-based compensation		-		-	847			-				-	847
Net income		-		-		-	157					-	157
Other comprehensive income (loss)		-		-		-		-			1,314	1,314
Balances, June 30, 2020	10,570,360 $		18,865 $		591 $		77,322 $					596 $	97,374
The following table summarizes stockholders' equity transactions for the six-month period ended June 30, 2020 (Dollar amounts in thousands of U.S. dollars):
									Accumulated
					Additional						other		Total
	Common stock				paid in		Retained	comprehensive stockholders'
	Number			Amount		capital		earnings		income (loss)	equity

Balances, December 31, 2019	10,585,159		16,633		880		76,208					473	94,194

Exercise of stock options	41,935		356		(310)			-				-	46
Shares deducted from exercise of stock optionsfor payment of withholding taxes and exerciseconsideration
	(18,870)			-	(347)			-				-	(347)
Acquisition of Cedar Holdings Group	32,374		2,000			-		-				-	2,000
Repurchase and retirement of shares	(70,238)		(124)		(1,280)		(1,877)					-	(3,281)
Stock-based compensation		-		-	1,648			-				-	1,648
Net income		-		-		-	2,991					-	2,991
Other comprehensive income (loss)		-		-		-		-				123	123
Balances, June 30, 2020	10,570,360 $		18,865 $		591 $		77,322 $					596 $	97,374
2020 Stock Buyback Program On February 12, 2020, the Company announced that its Board had approved a stock buyback program to repurchase up to $40 million of its common stock in the openmarket. The $40 million buyback program commenced on February 13, 2020 and is expected to terminate on February 12, 2021. For the three months ended June 30, 2020,the Company repurchased 3,500 shares under this program for total consideration of $0.2 million. For the six months ended June 30, 2020, the Company repurchased70,238 shares under this program for total consideration of $3.3 million. 2019 Stock Buyback Program On February 13, 2019, the Company announced that its Board had approved a stock buyback program to repurchase up to $40 million of its common stock in the openmarket. The $40 million buyback program commenced on February 14, 2019 and terminated on February 13, 2020. During the three and six months ended June 30, 2019, aswell as the six months ended June 30, 2020, the Company did not repurchase any shares under this program. 2018 Stock Buyback Program On February 14, 2018, the Company announced that its Board of Directors has approved a stock buyback program to repurchase up to $40 million of its common stock inthe open market. Purchases were to be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February14, 2018 and terminated on February 13, 2019. During the six months ended June 30, 2019, the Company did not repurchase any shares under this program.
			23

Table of Contents 16. Share-based Payments: Stock options

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use ofsubjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent theweighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatilityof 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 onhistorical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed invaluing 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 expecteddividend yield percentage by dividing the expected annual dividend by the market price of Tucows Inc. common shares at the date of grant. Details of stock option transactions for the three months ended June 30, 2020 and June 30, 2019 are as follows (Dollar amounts in thousands of U.S. dollars, except pershare amounts):
	Three Months Ended June 30, 2020 Three Months Ended June 30, 2019
				Weighted				Weighted
				average				average
	Number of		exercise price			Number of	exercise price
		shares		per share		shares		per share

Outstanding, beginning of period		730,037 $			50.85	665,156 $			44.46
Granted		190,025			59.53	144,300			62.12
Exercised		(16,922)			9.79					(25,316)	13.26
Forfeited		(4,826)			59.15		(8,550)		56.08
Expired		(1,036)			58.39		(675)		55.65
Outstanding, end of period		897,278			53.41	774,915			48.63
Options exercisable, end of period		390,868 $			46.20	306,078 $			33.97
Details of stock option transactions for the six months ended June 30, 2020 and June 30, 2019 are as follows (Dollar amounts in thousands of U.S. dollars, except pershare amounts):
		Six Months Ended June 30, 2020				Six Months Ended June 30, 2019
				Weighted				Weighted
				average				average
	Number of		exercise price			Number of	exercise price
		shares		per share		shares		per share

Outstanding, beginning of period		754,497 $			49.94	702,337 $			43.80
Granted		195,525			59.19	144,300			62.12
Exercised		(41,935)			16.23					(54,359)	19.34
Forfeited		(8,315)			60.23					(15,301)	57.55
Expired		(2,494)			59.86		(2,062)		55.65
Outstanding, end of period		897,278			53.41	774,915			48.63
Options exercisable, end of period		390,868 $			46.20	306,078 $			33.97
As of June 30, 2020, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were as follows:
												Options outstanding				Options exercisable
												Weighted	Weighted	Weighted	Weighted
												average	average	average					average
												exercise	remaining	Aggregate				exercise	remaining		Aggregate
											Number	price per	contractual	intrinsic		Number		price per	contractual		intrinsic
Exercise price												outstanding	share		life (years)	value		exercisable		share		life (years)	value

$10.16 - $19.95														62,090 $	16.23			1.2 $	2,551	62,090 $		16.23	1.2 $	2,551
$21.10 - $27.53														51,250	24.11			1.4	1,702	51,250		24.11	1.4	1,702
$35.25 - $37.35														14,375	35.89			2.9	308	13,125		35.95	2.9	280
$46.90 - $47.00														15,000	47.30			5.7	150	3,750		47.00	3.7	39
$51.82 - $58.65																340,878	55.52			4.0	640	175,527	55.69	3.8	310
$60.01 - $64.10																413,685	61.71			6.1	-	85,126	63.33	5.3	-
																897,278 $	53.41			4.7 $	5,351	390,868 $	46.20	3.4 $	4,882


																	Total unrecognized compensation cost relating to unvested stock options at June 30, 2020, prior to the consideration of expected forfeitures, is approximately
$8.8 million and is expected to be recognized over a weighted average period of 2.6 years.
																	The Company recorded stock-based compensation of $0.8 million for the three months ended June 30, 2020, and $0.7 million for the three months ended June 30,
2019, respectively.
																	The Company recorded stock-based compensation of $1.6 million for the six months ended June 30, 2020, and $1.2 million for the six months ended June 30, 2019,
respectively.
																	The Company has not capitalized any stock-based compensation expense as part of the cost of an asset.

	24

Table of Contents 17. Fair Value Measurement:
	For financial assets and liabilities recorded in our financial statements at fair value we utilize 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 orliabilities. 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 orindirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company’s ownassumptions 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 levelinput that is significant to the fair value measurement. The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as at June 30, 2020 (Dollaramounts in thousands of U.S. dollars):
			June 30, 2020
						Assets
				Fair Value Measurement Using		(Liabilities)
							Level 1		Level 2	Level 3	at Fair value

Derivative instrument asset		$		- $	1,691 $			- $	1,691

Derivative instrument liability		$		- $	(719) $			- $	(719)

Total assets (liability)		$		- $	972 $			- $	972
The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as at December 31,2019 (Dollar amounts in thousands of U.S. dollars):
			December 31, 2019
						Assets
				Fair Value Measurement Using		(Liabilities)
							Level 1		Level 2	Level 3	at Fair value

Derivative instrument liability		$		- $	731 $			- $	731

Total liabilities		$		- $	731 $			- $	731
18. Contingencies:
	From time to time, the Company has legal claims and lawsuits in connection with its ordinary business operations. The Company vigorously defends such
claims. While the final outcome with respect to any actions or claims outstanding or pending as of June 30, 2020 cannot be predicted with certainty, management doesnot believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company's financial position. 19. Subsequent Events:
On August 1, 2020, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and between the Company and DISH Wireless
L.L.C.(“DISH”). Under the Purchase Agreement and in accordance with the terms and conditions set forth therein, the Company sold to DISH its mobile customeraccounts that are marketed and sold under the Ting brand (other than certain customer accounts associated with one network operator) (“Transferred Assets”).Tucows will retain minimum revenue commitments totaling $51.5 million on the Mobile Network Operator (“MNO”) contract associated with the customers excludedfrom the definition of Transferred Assets. The Company will be able to continue adding customers under the excluded MNO contract working with DISH in order tomeet the agreement.
The Purchase Agreement also sets forth certain rights and obligations with respect to intellectual property matters, including the right to use and purchase the
name "Ting" and its associated domain name.
Approximately 60 days following the execution of the Purchase Agreement, DISH and the Company will settle the working capital associated with the
Transferred Assets and, upon such settlement, DISH will pay to the Company an amount in cash that is generally equal to (i) the accounts receivable related to theTransferred Assets plus (ii) the value of the transferred inventory minus (iii) the accounts payable and accrued liabilities received related to the Transferred Assets. Inaddition, for a period of 10 years following the execution of the Purchase Agreement, DISH will pay a monthly fee to the Company generally equal to an amount of netrevenue received by DISH in connection with the transferred customer accounts minus certain fees and expenses, as further set forth in the Purchase Agreement. Theaggregate purchase price for the Transferred Assets is the working capital payment, the 10-year payment stream and DISH’s assumption of certain liabilities related tothe Transferred Assets.
Contemporaneously with the execution of the Purchase Agreement on August 1, 2020, the Company, through its wholly owned subsidiary Ting, Inc. entered a
services agreement under which Ting will act as a mobile service enabler (“MSE Agreement”) with DISH in support of the DISH’s mobile network operations. The termof the agreement is four years with an automatic one-year extension upon achievement of certain milestones. Under the terms of the MSE Agreement, the Companyand its affiliates are permitted to sell mobile service enabler services to other third parties.
The Company also entered into the Transitional Services Agreement (“TSA”) on August 1, 2020 with DISH, under which the Company will provide certain other
services such as customer service, marketing and fulfillment services. DISH has option to terminate services provided under the TSA throughout the term of theagreement, which is for five years effective August 1, 2020.


		25

Table of Contents 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 financialresults and other aspects of our business that involve risks and uncertainties and may constitute forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995. Words such as “may,” “should,” “anticipate,” “believe,” “plan,” “estimate,” “expect” and “intend,” and other similarexpressions are intended to identify forward-looking statements. The forward-looking statements contained in this report include statements regarding, among otherthings: the competition we expect to encounter as our business develops and competes in a broader range of Internet services; the Company's foreign currencyrequirements, specifically for the Canadian dollar; Ting mobile, and fixed Internet access subscriber growth and retention rates; our belief regarding the underlyingplatform for our domain services, our expectation regarding the trend of sales of domain names and advertising; our expectations regarding portfolio revenue, our beliefthat, 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 inthe future; our expectation regarding litigation; the potential impact of current and pending claims on our business; our valuations of certain deferred tax assets; ourexpectation to collect our outstanding receivables, net of our allowance for doubtful accounts; our expectation regarding fluctuations in certain expense and costcategories; our expectations regarding our unrecognized tax; our expectations regarding cash from operations to fund our business; the impact of cancellations of oramendments to market development fund programs under which we receive funds, our expectation regarding our ability to manage realized gains/losses from foreigncurrency contracts; our expectations regarding increased price competition among MVNO; our expectations regarding costs associated with migrating Ting customersusing the Sprint platform to an alternative platform upon completion of our contract with Sprint; the impact of the COVID-19 outbreak on our business, operations andfinancial performance; and general business conditions and economic uncertainty. These statements are based on management’s current expectations and are subject toa number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Many factors affectour ability to achieve our objectives and to successfully develop and commercialize our services including:
•	Changes in the nature of key strategic relationships with our 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 chargesubscribers 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 service our debt commitments;

	•	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 commercialcustomers while maintaining the development and sales of our established services;

	•	Adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, including with respect to the impact of the TaxCuts and Jobs Act of 2017;

	•	The application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate taxdetermination is uncertain;

	•	Our ability to effectively integrate acquisitions;

	•	Our ability to attract and retain customers by securing access to the latest mobile network technology, and migrating existing customers when necessary;

	•	Our ability to migrate existing Sprint customers to one of our MVNO partners, in an efficient and cost-effective manner;

	•	Our ability to monitor, assess and respond to the rapidly changing impacts of the COVID-19 pandemic. Our current assessment of expected impacts has beenincluded below as part of the Opportunities, Challenges & Risks section. In the current period, the Company shut down the Roam Mobility brands andrelated businesses as a result of lack of demand for SIM-enabled roaming services due to the current and expected longer term reduction of business andleisure travel caused by the COVID-19 pandemic;

	•	Our ability to collect anticipated payments from DISH in connection with the 10-year payment stream that is a function of the revenue generated by thetransferred subscribers over a 10-year period pursuant to the terms of the Purchase Agreement;

	•	Pending or new litigation; and

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Table of Contents
•	Factors set forth under the caption “Item 1A Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SECon March 4, 2020 (the “2019 Annual Report”).

As previously disclosed the under the caption “Item 1A Risk Factors” in our 2019 Annual Report, data protection regulations may impose legal obligations on us thatwe cannot meet or that conflict with our ICANN contractual requirements. This list of factors that may affect our future performance and financial and competitive position and the accuracy of forward-looking statements is illustrative, but it isby no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All forward-lookingstatements 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 cautionarystatements or any forward-looking statements, except as required by law. 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 of our customers’ experience as they access the Internet (at home or on the go) and while using Internet services suchas domain name registration, email and other Internet services. We are organized, managed and report our financial results as two segments, Network Access Servicesand Domain Services, which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. Our management regularly reviews our operating results on a consolidated basis, principally to make decisions about how we utilize our resources and to measure ourconsolidated operating performance. To assist us in forecasting growth and to help us monitor the effectiveness of our operational strategies, our management regularlyreviews revenue for each of our service offerings in order to gain more depth and understanding of the key business metrics driving our business. Accordingly, wereport Network Access Services and Domain Services revenue separately For the three months ended June 30, 2020 and June 30, 2019, we reported revenue of $82.1 million and $84.1 million, respectively. For the six months ended June 30, 2020 and June 30, 2019, we reported revenue of $166.1 million and $163.1 million, respectively.

	Network Access Services
Network Access Services includes mobile, fixed high-speed Internet access services and other revenues, including, billing solutions to small ISPs. Our primary mobile service offering, Ting Mobile, is mainly distributed through the Ting website and to a lesser extent certain third-party retail stores and on-lineretailers. We generate revenues from the sale of retail telephony services, mobile phone hardware and related accessories to individuals and small businesses throughthe 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, andsuperior customer care. On August 1, 2020, the Company and its wholly owned Subsidiary Ting, Inc. entered into an Asset Purchase Agreement (the “PurchaseAgreement”) with DISH pursuant to which Ting sold its mobile customer relationships, and mobile handset and SIM inventory to DISH and granted DISH the right touse and purchase the Ting brand. The transferred assets under the Purchase Agreement do not include the technology platforms and related intellectual property andinfrastructure necessary to enable or support the mobile customers. The Company will retain assets used to provide MSE services to DISH, as discussed below. OurRoam Mobility, Zipsim and Always Online Wireless brands (collectively “Roam Mobility brands”) operate as a MVNO on the same nationwide Global System for Mobilecommunications network as Ting Mobile. Roam Mobility brands cater to international travelers and distribute products through third-party retail stores and productbranded websites. As at June 30, 2020, the Company shut down the Roam Mobility brands and related businesses as a result of lack of demand for SIM-enabledroaming services due to the current and expected longer term reduction of business and leisure travel caused by the COVID-19 pandemic. The Company also derives revenue from the sale of fixed high-speed Internet access, Ting Internet, in select towns throughout the United States, with further expansionunderway to both new and existing Ting towns. Our primary sales channel of Ting Internet is through the Ting website. The primary focus of Ting Internet is to providereliable Gigabit Internet services to consumer and business customers. On January 1, 2020, the Company closed its previously disclosed acquisition of Cedar. Cedar is atelecommunications provider serving multiple markets in the Western Slope of Colorado and northwestern New Mexico. Cedar has focused the last several years onbuilding fiber to enterprise, anchor institution, and residential customers. Revenues from Ting Mobile and Ting Internet are generated in the U.S. and are provided on a monthly basis with no fixed contract term. Revenues from Roam Mobilitybrands are generated in the U.S. and Canada on a prepaid usage basis with no fixed contract terms. As of June 30, 2020, Ting managed mobile telephony services for approximately 257,000 subscribers and 150,000 accounts. For a discussion of subscribers and how theyimpacted our financial results, see the Net Revenue discussion below.

	Domain Services
Domain Services includes wholesale and retail domain name registration services, value added services and portfolio services derived through our OpenSRS, eNom,Ascio, EPAG and Hover brands. We earn revenues primarily from the registration fees charged to resellers in connection with new, renewed and transferred domainname registrations. In addition, we earn revenues from the sale of retail domain name registration and email services to individuals and small businesses; and by makingour portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, mainly the Canadianand the U.S. Ascio domain services contracts, which were acquired by the Company on March 18, 2019, and EPAG primarily originate in Europe.
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Table of Contents Our primary distribution channel is a global network of approximately 36,000 resellers that operate in over 150 countries and who typically provide their customers, theend-users of Internet-based services, with solutions for establishing and maintaining an online presence. Our primary focus is serving the needs of this network ofresellers by providing the broadest portfolio of generic top-level domain (“gTLD”) and the country code top-level domain options and related services, a white-labelplatform that facilitates the provisioning and management of domain names, a powerful Application Program Interface, easy-to-use interfaces, comprehensivemanagement and reporting tools, and proactive and attentive customer service. Our services are integral to the solutions that our resellers deliver to their customers. Weprovide “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 NetworkOperating 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 inour 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, eNom, EPAG and Ascio, derives revenue from its domain service and from providing value-added services. The OpenSRS,eNom, EPAG and Ascio domain services manage 24.6 million domain names under the Tucows, eNom, EPAG and Ascio ICANN registrar accreditations and for otherregistrars under their own accreditations, which has decreased by 0.4 million domain names since June 30, 2019. The decrease is driven by the continued erosion ofregistrations related to non-core customers from our Enom brand, offset by increased registrations experienced by our other brands during COVID-19, as morebusinesses established an online presence. Value-Added Services include hosted email which provides email delivery and webmail access to millions of mailboxes, Internet security services, Internet hosting,WHOIS privacy, publishing tools and other value-added services. All of these services are made available to end-users through a network of 36,000 web hosts, 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 advertisingrevenue 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 registrationand email services to individuals and small businesses. Retail also includes our Personal Names Service – based on over 36,000 surname domains – that allows roughlytwo-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 including our reseller network. In the fourth quarter of 2019, the Company disposed of its entire domain portfolio, excluding surname domains used in the Realnames email service. The Companyexpects portfolio revenue to materially decline in Fiscal 2020 and thereafter. KEY BUSINESS METRICS AND NON-GAAP MEASURES
	We regularly review a number of business metrics, including the following key metrics and non-GAAP measures, to assist us in evaluating our business,
measure the performance of our business model, identify trends impacting our business, determine resource allocations, formulate financial projections and makestrategic business decisions. The following tables set forth the key business metrics which we believe are the primary indicators of our performance for the periodspresented: 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, oninvestor conference calls and related events that exclude certain non-cash and other charges as we believe that the non-GAAP information enhances investors’ overallunderstanding of our financial performance. Please see discussion of adjusted EBITDA in the Results of Operations section below. Ting Mobile
		June 30,(1)
				2020		2019
		(in '000's)
Ting mobile accounts under management		150	157
Ting mobile subscribers under management		257	280

(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
	Revenues discussion below.

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Table of Contents Ting Internet
	For the Three Months Ended June 30,
	2020		2019
		(in '000's)
Ting Internet accounts under management		13	9
Ting Internet serviceable addresses (1)		48	34

(1) Defined as premises to which Ting has the capability to provide a customer connection in a service area.
Domain Services
	For the Three Months Ended June 30,(1)
	2020		2019
		(in 000's)
Total new, renewed and transferred-in domain name registrations provisioned		4,747	4,377
Domains under management

(1) For a discussion of these period-to-period changes in the domains provisioned and domains under management and how they impacted our financial results
				see the Net Revenues discussion below.
Domain Services
	For the Six Months Ended June 30,(1)
	2020		2019
		(in 000's)
Total new, renewed and transferred-in domain name registrations provisioned		9,503	8,939
Domains under management

(1) For a discussion of these period-to-period changes in the domains provisioned and domains under management and how they impacted our financial results
				see the Net Revenues discussion below.
Domain Services
		June 30,
		2020		2019
		(in 000's)
Registered using Registrar Accreditation belonging to the Tucows Group		19,385	19,852
Registered using Registrar Accreditation belonging to Resellers		5,207	5,158
Total domain names under management		24,592	25,010

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Table of Contents OPPORTUNITIES, CHALLENGES AND RISKS
	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 beadversely 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 foreigncurrency exposure is to manage our financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some or all of the impact of foreigncurrency exchange movements by entering into foreign exchange forward contracts to mitigate the exchange risk on a portion of our Canadian dollar exposure. We maynot always enter into such forward contracts and such contracts may not always be available and economical for us. Additionally, the forward rates established by thecontracts may be less advantageous than the market rate upon settlement.
	Network Access Services As a MVNO our Ting Mobile 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 entailsrisks. Should they fail to implement, maintain and expand their network capacity and coverage, adapt to future changes in technologies and continued access to anddeployment of adequate spectrum successfully, our ability to provide wireless services to our subscribers, to retain and attract subscribers and to maintain and grow oursubscriber revenues could be adversely affected, which would negatively impact our operating margins.
	Ting Mobile enjoyed rapid growth in its first four years of operation with the growth slowing for the past two years. During the rapid growth phase, we were
able to continue to grow gross customer additions and maintain a consistent churn rate, which allowed us to maintain net new customer additions despite the impact ofchurn on a fast-growing customer base. We have also been able to supplement organic growth with bulk migrations of customer bases of other MVNOs. We expectprice competition to grow more intense in the industry which could result in increased customer churn or reductions of customer acquisition rates either of which couldresult in a further slowing growth rate or in certain cases, our ability to maintain growth.
	On August 1, 2020, the Company and its wholly owned Subsidiary Ting, Inc. entered into an Asset Purchase Agreement (the “Purchase Agreement”) with
DISH pursuant to which Ting sold its mobile customer relationships, and mobile handset and SIM inventory to DISH and granted the right to use and purchase the Tingbrand. Select MNO agreements previously established to operate the Ting Mobile MVNO business will also be assigned to DISH as part of this PurchaseAgreement. The transferred assets under the Purchase Agreement do not include the technology platforms and related intellectual property and infrastructurenecessary to enable or support the mobile customers. The Company will retain assets used to provide MSE services to DISH, as discussed below.
	Contemporaneously with the execution of the Purchase Agreement on August 1, 2020, the Company, through its wholly owned subsidiary Ting, Inc. entered
into a services agreement under which Ting will act as a mobile service enabler (“MSE Agreement”) with DISH in support of DISH’s mobile network operations. Underthe terms of the MSE Agreement, the Company and its affiliates are permitted to sell mobile service enabler services to other third parties.
	As an ISP, we have invested and expect to continue to invest in new fiber to the home (“FTTH”) deployments in select markets in the United States. The
investments are a reflection of our ongoing efforts to build FTTH network via public-private partnerships in communities we identify as having strong, unmet demandfor FTTH services. Given the significant upfront build and operational investments for these FTTH deployments, there is risk that future technological and regulatorychanges as well as competitive responses from incumbent local providers, may result in us not fully recovering these investments.
	The communications industry continues to compete on the basis of network reach and performance, types of services and devices offered, and price. Domain Services 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 facepricing pressure, which can adversely impact our revenues and profitability. To address these risks, we have focused on leveraging the scalability of our infrastructureand 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 withthe introduction of new gTLDs, particularly for large volume customers, such as large web hosting companies and owners of large portfolios of domain names. We havea relatively limited ability to increase the pricing of domain name registrations without negatively impacting our ability to maintain or grow our customer base. Growth inour Domain Services revenue is dependent upon our ability to continue to attract and retain customers by maintaining consistent 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 bothresellers 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 throughthe OpenSRS Domain Expiry Stream. The revenue associated with names sales and advertising has recently experienced flat to declining trends due to the uncertaintyaround the implementation of ICANN’s New gTLD Program, lower traffic and 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 achievedduring past periods.
	Sales of domain names from our domain portfolio have a negative impact on our advertising revenue as these names are no longer available for advertising
purposes. In addition, the timing of larger domain names portfolio sales is unpredictable and may lead to significant quarterly fluctuations in our Portfolio revenue. Inthe fourth quarter of 2019, the Company disposed of its remaining domain portfolio, excluding surname domains used in the Realnames email service. The Companyexpects portfolio revenue to materially decline in Fiscal 2020 and thereafter.

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Table of Contents Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and judgements that affect the reported amounts ofassets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. There have been no material changes to the critical accountingpolicies and estimates as previously disclosed in Part II, Item 7 of our 2019 Annual Report. For further information on our critical accounting policies and estimates, seeNote 3 – Recent Accounting Pronouncements to the consolidated financial statements of the Company in Part I, Item 1 in this Quarterly Report on Form 10-Q.

Current COVID-19 Response Our Employees Tucows is a global business. Our first consideration during the global pandemic as a result of the disease caused by the COVID-19 outbreak is for the health and safetyof our employees, our customers and their communities, all around the world. Tucows has long encouraged a culture of remote work even prior to this global pandemic,and on Sunday March 8, 2020 Tucows’ executive leadership announced that all employees who could conceivably work from home were encouraged to do so. Tucows isactively and strongly encouraging its workforce to heed travel and all other emergency advisories, including social distancing and where appropriate, self-isolation. Weexpect our work from home policy to remain in effect until emergency state and governmental declarations where we have physical offices have ended and we believethe risk of community spread of the disease has subsided. Given our experience with remote work prior to COVID-19, we have not and do not expect to haveproductivity issues while the overwhelming majority of our office-based workforce is dispersed. For the small group of employees who are unable work from home during this time, including our order fulfillment and Fiber installation teams, many of whom work in thefield, they are encouraged to practice social distancing and to continue to follow hygiene best practices and safety protocols as outlined by the Centers for DiseaseControl and Prevention. At the initial stage of the COVID-19 outbreak, we took steps to cancel and reschedule all in-home installation and service appointments acrossour Ting Fiber footprint. Since then, the Ting Internet team has established an install solution for our employees and customers that minimizes risks associated withperson-to-person contact. Our Customers We recognize the important role we play within the Internet space and are committed to continue providing quality service during the COVID-19 outbreak. Services likeindividual and wholesale domain names, email and hosting do not rely on in-person interaction or the supply chain in the same way physical products and services do.We are providing uninterrupted services for all Domains related services, across our OpenSRS, Enom, Ascio, EPAG & Hover brands. Our Mobile services businesses are both without any physical storefronts, are similarly well-positioned to weather this event. While we have seen a drop in customerusage, we are fully prepared to continue providing uninterrupted services for all Mobile related services, across our brands where demand for such services exists. Weare committed to making sure no customer who is in need is without access to core mobile service while we work through this unprecedented situation together. In thecurrent period, the Company shut down the Roam Mobility brands and related businesses as a result of lack of demand for SIM-enabled roaming services due to thecurrent and expected longer term reduction of business and leisure travel caused by the COVID-19 pandemic. All customers were notified of this shutdown and wereappropriately refunded for any active prepaid service they were unable to use as a result of the shutdown. The operational and financial impacts of this shutdown arediscussed in more detail below. Our Fiber Internet business does not have bandwidth caps or other such limitations. Likewise, our networks are built with the capacity to accommodate future needs. Tohelp our customers remain connected at home during this time, we upgraded all our lower-tier fiber customers to symmetrical gigabit access at no charge. Any additionaltraffic from our customers working from home has not had and is not expected to have any negative impact on connectivity. As discussed above, our install solutionwas implemented in early May 2020. With this service limitation, new customer acquisition will remain slower than pre-pandemic levels of growth and installation. Evenwith an install solution that minimizes risks, customers may be unwilling to have service personnel visit their homes or offices. Our Community Tucows believes the Internet is essential infrastructure and an immensely powerful tool, especially in times of crises where coordination is essential. From an early point in the current global crisis, it was clear to us that we were going to need to do something new and different in how we responded to COVID-19related domain registrations. Many of these domains are registered for good, helpful purposes, such as community organization, dissemination of healthcareinformation, and recording people’s experiences through this pandemic. Others, however, purport to sell COVID-19 cures, vaccines, or tests, none of which arelegitimately available on the market at the time of the registration and many of which pose a significant health risk to the general public. There are three majorcomponents to our COVID-19 activities related to domain registrations: (i) identification, (ii) assessment for harm, and (iii) stakeholder engagement. It is important tonote that our response to each and every issue that we find is contextual and dependent on the specific circumstances. We expect to return to our regular procedures asthe pandemic and corresponding risks subsides. Although this approach vastly increases the burden on our compliance staff and puts us in the uncomfortable positionof having to assess the level of harm represented by a COVID-related domain and the website to which it resolves - we feel these circumstances are exceptional and aredetermined to do our part. In order to provide Internet access and assistance to residents of cities and towns that are part of the Ting Fiber network, we have set up free, fiber-fed, drive-up Wi-Fihotspots. These hotspots enable those with no home Internet access, or insufficient access, to access critical services like online learning and telehealth services, workremotely, check in on and access vital health, government and other services and generally access information. These hotspots will remain in operation as long as theyare needed and as long as it is safe and prudent to do so. We have not experienced any material resource constraints nor do we foresee requiring any material expenditures to continue to implement our business continuityplans described above.
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Table of Contents Current and expected COVID-19 Impacts Financial & Operational Impacts Further to the below discussion within this Quarterly Report around the financial condition and results of operations for the current period financial results, the currentimpact from COVID-19 has been limited to the Network Access - Mobile Services segment. Management continues to assess the impact on a daily basis and expectscontinued impact through the third quarter of 2020, should the COVID-19 pandemic persist. On a segment basis, our current assessment is as follows: Network Access – Mobile Services: Both our Mobile Services businesses are completely online and do not rely on physical storefronts to attract or service customers’ needs. While we have seen a drop incustomer usage, we are fully prepared to continue providing uninterrupted services for all Mobile related services, across our brands where demand for such servicesexists. COVID-19 has impacted the demand for our Mobile services as customer usage patterns changed, which has had a corresponding negative impact on ourrevenues for this segment. We do not expect the impact to substantially worsen over the coming months as we have seen usage stabilize during the current period. Ting Mobile, our primary post-paid Mobile Services brand is an MVNO operating across the United States. From the onset of the COVID-19 pandemic, we saw amoderate drop in data usage by our customers, with some small uptick in voice and messaging usage. This is a direct result of social distancing measures enacted bystate and local authorities across the United States. With our customers staying indoors and working from home, they now rely on an increased use of home Wi-Finetworks rather than mobile data services. This reduced usage stabilized during the second quarter of 2020 and we expect it to only return to pre-pandemic usage levelsonce social distancing measures are relaxed. Additionally, at the onset of the pandemic, we saw an increased churn rate of low-margin business accounts as their ownbusinesses came to a halt. This has not rebounded through the second quarter of 2020 as many social distancing measures and business closures remain in place acrossthe United States and may continue as such given the increased uncertainty around secondary waves of shutdown as the pandemic progresses. Our core consumercustomer base remains intact but have been experiencing minimal levels of both growth and churn. We do not foresee any increased risk of churn or collection risk givenour current situation, but realize that collection risk could increase as government stimulus measures expire and impact a customer's ability to pay. Although we maintainminimum purchase guarantees with our MNOs, we do not expect any material shortfalls with respect to reduced usage from COVID-19. Roam Mobility, our niche prepaid Mobile Services brand that provides Mobile Services for people travelling within the United States and Worldwide has accounted forthe majority of the negative financial impact caused by COVID-19. The business relies on global travel as a key factor in its success. With travel restrictions and borderclosures essentially resulting in the halt of business and leisure travel, we saw new revenues for Roam Mobility trend toward zero through the end of the first quarter of2020. Management monitored the situation closely through the second quarter and took substantial measures to reduce and eliminate any unnecessary costs within thatbusiness. Unfortunately, given the continued uncertainty around reopening of borders, easing of travel restrictions and consumers’ level of comfort with business andleisure travel in a post pandemic world, we made the decision to shut down operations of all Roam brands effective June 30, 2020. We will continue to refund activeplans for existing customers through to August 31, 2020. The assets associated with Roam are insignificant to the consolidated Company total, with the total currentperiod impairment charge related to the shutdown totaling $1.43 million. Network Access – Other Services: As discussed above, upon news of the COVID-19 outbreak, we took the major step to cancel and reschedule all in-home installation and service appointments acrossour Ting Fiber footprint. Since then, the Ting Internet team has established a smart-install solution. This smart-install solution is faster and more efficient than ourexisting process, all while protecting the health and safety of our employees and customers alike. Although new customer installations initially slowed near the end ofthe first quarter of 2020, we are now seeing returned growth in both subscribers under management as well as serviceable addresses relative to the prior quarter.Additionally, our existing customer base and most recent acquisition of Cedar both continue to provide increased recurring revenue for us to support this business. Domain Services: Domain Services are foundational to the functioning of the Internet. As discussed above, services like individual and wholesale domain names, email and hosting do notrely on in-person interaction or the supply chain in the same way physical products and services do. We have not experienced any negative COVID-19 related impacts,either financially or operationally for Domains related services, across our OpenSRS, Enom, Ascio, EPAG & Hover brands. As more businesses face the reality ofprolonged physical shutdown and move to establish an online presence, we have seen growth in this segment, primarily driven by large volume resellers in ourOpenSRS brand where total domains under management increased 807,000 since March 31, 2020. This growth rate in domains under management was driven by thePandemic, and may not be sustained in the future as domain registrations plateau. Our results of operations for the current period financial results are in line withmanagement’s expectation for the period given product, customer mix and current brand trajectories. We will continue to monitor the impact but do not foresee anynegative financial or operational impacts associated with this segment.

Table of Contents Liquidity & Financial Resource Impacts For a complete assessment of our liquidity and covenant positions please reference the relevant discussions within this Quarterly Report. We have experienced nosignificant change to our liquidity position or credit risk as a result of the financial and operational impacts related to COVID-19, as discussed above. Our cost or accessto funding sources has not changed and is not reasonably likely to change in the near future as a result of the pandemic. Our sources and uses of cash have not beenmaterially impacted and there is no known material uncertainty about our ongoing ability meet covenants or repayment terms of our credit agreements at this time. Internal Controls over Financial Reporting Tucows has long encouraged a culture of remote work even prior to COVID-19. Our financial reporting systems and our internal controls over financial reporting anddisclosure controls and procedures are already adapted for a remote work environment. There have been no changes during the current period that, as a result ofCOVID-19, would affect our ability to maintain these systems and controls. COVID-19 Related Assistance & Support Currently, Tucows has not received any form of financial or resource related assistance from any government or local authority. There do exist programs in the regions inwhich we operate that are designed to support corporations like Tucows during this time, primarily in the form employee wage subsidization. Tucows will continue toreview the applicability of these programs but does not expect to seek any assistance. Across our businesses, we have been able to defer portions of installment taxes payable to various Government bodies as payment timelines have been extended inresponse to the pandemic. Accounting Policy Impacts Given the rapidly changing nature of COVID-19 developments and the current uncertainty around the length and severity these developments could create, Tucowsdoes not have sufficient evidence to anticipate a material impairment with respect to goodwill, intangible assets, long-lived assets, or right of use assets. We willcontinue to monitor the impacts closely and as more information becomes available. We do not foresee any changes in accounting judgements in relation to COVID-19that will have a material impact on our financial statements.

Table of Contents RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AS COMPARED TO THE THREE AND SIX MONTHS ENDED JUNE30, 2019 NET REVENUES Network Access Services
	The Company generates Network Access Services revenues primarily through the provisioning of mobile services. Other sources of revenue include the
provisioning of fixed high-speed Internet access as well as billing solutions to ISPs. Mobile Services
	Ting Mobile wireless usage contracts grant customers access to standard talk, text and data mobile services. Ting Mobile contracts are billed based on the
actual amount of monthly services utilized by each customer during their billing cycle and charged to customers on a postpaid basis. Voice minutes, text messages andmegabytes of data are each billed separately based on a tiered pricing program. The Company recognizes revenue for Ting Mobile usage based on the actual amount ofmonthly services utilized by each customer.
	Ting Mobile services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following
each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Mobile customers is computed based on the customer’s activation date. In order torecognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billing cycle to the end ofeach reporting period. In addition, revenues associated with the sale of wireless devices and accessories are recognized when title and risk of loss is transferred to thecustomer and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
	Our Roam Mobility brands also offer standard talk, text and data mobile services. Roam customers prepay for their usage through the Roam Mobility website.
When prepayments are received the amount is deferred, and subsequently recognized as the Company satisfies its obligation to provide mobile services. In addition,revenues associated with the sale of SIM cards are recognized when title and risk of loss is transferred to the subscriber and shipment has occurred. Incentive marketingcredits given to customers are recorded as a reduction of revenue. As at June 30, 2020, the Company shut down the Roam Mobility brands and related businesses as aresult of lack of demand for SIM-enabled roaming services due to the significant reduction in business and leisure travel caused by the COVID-19 pandemic. Other services
	Other services derive revenues from providing Ting Internet to individuals and small businesses in select cities. In addition, we provide billing, provisioning
and customer care software solutions to ISPs through our Platypus billing software. Ting Internet access contracts provide customers Internet access at their home orbusiness through the installation and use of our fiber optic network. Ting Internet contracts are generally prepaid and grant customers with unlimited bandwidth basedon a fixed price per month basis. Since consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs itsobligation to provide Internet access.
	Ting Internet services are primarily contracted through the Ting website, for one month at a time and contain no commitment to renew the contract following
each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Internet access customers is computed based on the customer’s activation date. In orderto recognize revenue as the Company satisfies its obligations, we compute the amount of revenues earned but not billed from the end of each billing cycle to the end ofeach reporting period. In addition, revenues associated with the sale of Internet hardware to subscribers are recognized when title and risk of loss is transferred to thesubscriber and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue.
	In those cases, where payment is not received at the time of sale, revenue is not recognized until contract inception unless the collection of the related
accounts receivable is reasonably assured. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues atthe time of the sale based on historical experiences and current expectations.
		34

Table of Contents Domain Services Wholesale
	Domain registration contracts, which can be purchased for terms of one to ten years, provide our resellers and retail registrant customers with the exclusive
right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new,renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period.Though fees are collected upfront, revenue from domain registrations are recognized rateably over the registration period as domain registration contracts contain a‘right to access’ license of IP, which is a distinct performance obligation measured over time. The registration period begins once the Company has confirmed that therequested domain name has been appropriately recorded in the registry under contractual performance standards.
	Historically, our wholesale 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 forwhich 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 upontheir expiration. Domain services will continue to be the largest portion of our business and will further fuel our ability to sell add-on services.
	The Company is an ICANN accredited registrar. Thus, the Company is the primary obligor with our reseller and retail registrant customers and is responsible for
the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retailregistrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to thosecustomers. Accordingly, the Company does not recognize any revenue related to transactions between our reseller customers and their ultimate retail customers. Wholesale – Value-Added Services
	We derive revenue from domain related value-added services like digital certifications, WHOIS privacy and hosted email and by providing our resellers and
retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services areconsidered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain relatedvalue-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with thesatisfaction of the performance obligations.
	We also derive revenue from other value-added services, which primarily consists of Internet hosting services on the OpenSRS and eNom domain expiry
streams. 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
	The Company sells the rights to its portfolio domains or names acquired through the Company’s domain expiry stream. Revenue generated from sale of domain
name contracts, containing a distinct performance obligation to transfer the domain name rights under the Company’s control, is generally recognized once the rightshave been transferred and payment has been received in full. Domain portfolio names are sold through our premium domain name service, auctions or in negotiatedsales. In the fourth quarter of 2019, the Company disposed of its entire domain portfolio, excluding surname domains used in the Realnames email service. The Companyexpects portfolio revenue to materially decline in Fiscal 2020 and thereafter.
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Table of Contents The following table presents our net revenues, by revenue source (Dollar amounts in thousands of U.S. dollars):

(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
		2020			2019		2020				2019

Network Access Services:
Mobile Services	$		17,567 $	20,986 $	37,715 $	41,795
Other Services			4,414	2,644	8,722	5,087
Total Network Access Services			21,981	23,630	46,437	46,882

Domain Services:
Wholesale
Domain Services			46,206	46,485	92,169	89,076
Value Added Services			5,034	4,775	9,741	8,959
Total Wholesale			51,240	51,260				101,910	98,035

Retail			8,567	8,783	17,017	17,425
Portfolio			334						444	743		728
Total Domain Services			60,141	60,487				119,670	116,188

	$		82,122 $	84,117 $				166,107 $	163,070
(Decrease) increase over prior period	$		(1,995)	$			3,037
(Decrease) increase - percentage			(2)%				2%

The following table presents our revenues, by revenue source, as a percentage of total revenues (Dollar amounts in thousands of U.S. dollars):

	For the Three Months Ended June 30,	For the Six Months Ended June 30,
		2020			2019		2020				2019

Network Access Services:
Mobile Services			22%						25%	23%		26%
Other Services			5%						3%	5%		3%
Total Network Access Services			27%						28%	28%		29%

Domain Services:
Wholesale
Domain Services			56%						55%	55%		55%
Value Added Services			6%						6%	6%		5%
										Total Wholesale			62%	61%	61%	60%

Retail			11%						10%	11%		11%
Portfolio			0%						1%	0%		0%
Total Domain Services			73%						72%	72%		71%

			100%						100%	100%		100%

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Table of Contents
	Total net revenues for the three months ended June 30, 2020 decreased by $2.0 million, or 2%, to $82.1 million from $84.1 million when compared to the three
months ended June 30, 2019. The three-month decrease in revenue was primarily driven by $3.4 million of reduced revenues attributable to our Mobile Services brandsTing Mobile and Roam Mobility that were impacted by loss of mobile subscribers and reduced usage related to COVID-19 when compared to the three months endedJune 30, 2019. Additionally, further decreases in domain name services revenue of $0.3 million, related to a continued erosion in Wholesale domain registrations by non-core customers primarily from our existing Domain Services brands. These decreases were offset by Fiber access revenues which increased $1.8 million, driven by ourrecent first quarter acquisition of Cedar as well as through the expansion of our existing Ting Internet footprint.
	Total net revenues for the six months ended June 30, 2020 increased by $3.0 million, or 2%, to $166.1 million from $163.1 million when compared to the six
months ended June 30, 2019. The six-month increase in revenue was primarily driven by Fiber access revenues which increased $3.6 million driven by our recent firstquarter acquisition of Cedar as well as through the expansion of our existing Ting Internet footprint. Additionally, further increases of $3.5 million in revenues largelyattributable to our prior year acquisition of Ascio. Ascio revenues, which now represent a full two quarters of earned revenue compared to the stub period ofattributable revenue during the six months ended June 30, 2019. These increases were offset by Mobile Services revenue which decreased by $3.6 million due to adecrease in mobile subscribers and reduced usage related to COVID-19 as described above.
	Deferred revenue from domain name registrations and other Internet services at June 30, 2020 increased by $6.0 million to $155.3 million from $149.3 million at
December 31, 2019 primarily due to current period billings for domain name registration and service renewals.
	During the three and six months ended June 30, 2020, no customer accounted for more than 10% of total revenue. For the three and six months ended June 30,
2019, no customer accounted for more than 10% of total revenue. As at June 30, 2020 and December 31, 2019, no customer accounted for more than 10% of accountsreceivable. Though a significant portion of the Company’s domain services revenues are prepaid by our customers, where the Company does collect receivables,significant management judgment is required at the time revenue is recorded to assess whether the collection of the resulting receivables is reasonably assured. On anongoing basis, we assess the ability of our customers to make required payments. Based on this assessment, we expect the carrying amount of our outstandingreceivables, net of allowance for doubtful accounts, to be fully collected. Network Access Services Mobile Services
	Net revenues from mobile phone equipment and services for the three months ended June 30, 2020 decreased by $3.4 million or 16% to $17.6 million as
compared to the three months ended June 30, 2019. This decrease reflects a decline in mobile service revenue, which decreased by $4.0 million compared to June 30,2019, to $15.5 million. Ting Mobile accounts for $2.9 million of this decrease, followed by Roam Mobility at $1.1 million of the total decrease. The decline in servicerevenues is a result of the decline in mobile subscribers and reduced usage related to the COVID-19 pandemic. As at June 30, 2020, the Company shut down the RoamMobility brands and related businesses as a result of lack of demand for SIM-enabled roaming services due to lack of business and leisure travel caused by thepandemic. Revenues from the sale of mobile hardware and related accessories increased by $0.6 million compared to June 30, 2019, to $2.0 million. The increase in devicerevenue was primarily driven by strong sales and refreshed product mix for devices compared to the three months ended June 30, 2019.
	Net revenues from mobile phone equipment and services for the six months ended June 30, 2020 decreased by $4.1 million or 10% to $37.7 million as compared
to the six months ended June 30, 2019. This decrease reflects a decline in mobile service revenue, which decreased by $4.8 million compared to June 30, 2019, to$34.1 million. Ting Mobile accounts for $3.4 million of this decrease, followed by Roam Mobility at $1.4 million of the total decrease. The decline in service revenues is aresult of the decline in mobile subscribers and reduced usage related to the COVID-19 pandemic. Revenues from the sale of mobile hardware and related accessoriesincreased by $0.7 million compared to June 30, 2019, to $3.6 million. The increase in device revenue was primarily driven by strong sales and refreshed product mixfor devices compared to the six months ended June 30, 2019.
	As of June 30, 2020, Ting Mobile, our post-paid Mobile Services brand had 150,000 mobile accounts and 257,000 subscribers under its management compared
to 157,000 accounts and 280,000 subscribers under its management as of June 30, 2019. Other Services
	Other revenues from Ting Internet and billing solutions generated $4.4 million in revenue during the three months ended June 30, 2020, up $1.8 million or 69%
compared to the three months ended June 30, 2019. This growth is driven by the recent first quarter acquisition of Cedar. Cedar contributed $1.2 million of the increasein revenue during the current period, with $0.6 million related to the continued expansion of our Ting Internet footprint in existing Ting towns throughout the UnitedStates.
	Other revenues from Ting Internet and billing solutions generated $8.7 million in revenue during the six months ended June 30, 2020, up $3.6 million or 71%
compared to the six months ended June 30, 2019. This growth is driven by the recent first quarter acquisition of Cedar. Cedar contributed $2.4 million of the increase inrevenue during the current period, with $1.2 million related to the continued expansion of our Ting Internet footprint in existing Ting towns throughout the UnitedStates.
	As of June 30, 2020, Ting Internet had access to 49,000 serviceable addresses and 13,000 active accounts under its management compared to having access to
34,000 serviceable addresses and 9,000 active accounts under its management as of June 30, 2019. These figures include the increase in serviceable addressesand accounts attributable to the prior quarter Cedar acquisition.

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Table of Contents Domain Services Wholesale During the three months ended June 30, 2020, Wholesale domain services revenue decreased by $0.3 million or 1% to $46.2 million, when compared to the three monthsended June 30, 2019. The three-month decrease was primarily driven by a $1.2 million decrease in Wholesale domain revenue, driven by a decline in domain registrationsby non-core customers from our eNom and Ascio brands. This decrease on eNom and Ascio was offset by increased Wholesale domain revenues of $0.9 million fromour other domain services brands, namely OpenSRS and EPAG. This offsetting increase is a result of increased domains under management for these brands associatedwith an uptick in registrations during the second quarter of 2020 in connection with COVID-19. As more businesses establish an online presence during this time, wehave seen growth from large volume resellers across these brands. This has had a marginal impact on revenue in the current period but will have a carryforward impactin subsequent periods as revenues are recognized from previously deferred billings. During the six months ended June 30, 2020, Wholesale domain services revenue increased by $3.1 million or 3% to $92.2 million, when compared to the six months endedJune 30, 2019. The six-month increase was primarily driven by a $5.0 million increase in revenue related to the prior year acquisition of Ascio. Ascio revenues nowrepresent a full two quarters of earned revenue compared to the stub period of attributable revenue during the six months ended June 30, 2019. Additionally, we saw afurther increase in Wholesale domain revenues of $1.2 million from our other domain services brands, namely OpenSRS and EPAG due to the increased registrations as aresult of COVID-19 discussed above. These increases were offset by a decrease of $3.1 million in Wholesale domain revenues related to our eNom brand, driven bycontinued decline in domain registrations by non-core customers relative to the six months ended June 30, 2019. Total domains that were managed under the OpenSRS, eNom, EPAG, and Ascio domain services decreased by 0.4 million domain names to 24.6 million as of June 30,2020, when compared to 25.0 million at June 30, 2019. The decrease is a driven by the continued erosion of registrations related to non-core customers from our eNombrand. All increases discussed above related to our other Wholesale domain brands have not increased at a rate equal to the erosion experienced by eNom, thusresulting in a net decrease in total domains under management for the period in comparison. During the three months ended June 30, 2020, value-added services increased by $0.2 million to $5.0 million compared to the three months ended June 30, 2019. Thethree-month increases were primarily driven by an increase in expiry revenue of $0.5 million, offset by a decrease in hosting revenue of $0.1 million and decrease inDigital Certificates, Email and Other revenues of $0.1 million. During the six months ended June 30, 2020, value-added services increased by $0.7 million to $9.7 million compared to the six months ended June 30, 2019. The six-monthincreases were primarily driven by an increase in expiry revenue of $1.2 million, offset by a decrease in hosting revenue of $0.3 million and decrease in Digital Certificatesrevenue of $0.1 million. Retail Net revenues from retail for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019, decreased by less than $0.2 million to $8.6million. Revenue decreased as a result of a shrinking eNom customer base, driven by non-core customers. Net revenues from retail for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019, decreased by less than $0.4 million to $17.0 million.Revenue decreased as a result of a shrinking eNom customer base, driven by non-core customers. Portfolio Net revenues from portfolio for the three months ended June 30, 2020, decreased by $0.1 million to $0.3 million, as compared to the three months ended June 30, 2019,due to lower proceeds from individual portfolio sales compared to the three months ended June 30, 2019. In the fourth quarter of 2019, the Company disposed of itsentire domain portfolio, excluding surname domains used in the Realnames email service. The Company expects portfolio revenue to materially decline in Fiscal 2020 andthereafter. Net revenues from portfolio for the six months ended June 30, 2020 were flat as compared to the six months ended June 30, 2019. In the fourth quarter of 2019, theCompany disposed of its entire domain portfolio, excluding surname domains used in the Realnames email service. The Company expects portfolio revenue to materiallydecline in Fiscal 2020 and thereafter. COST OF REVENUES Network Access Services Mobile Services
	Cost of revenues for mobile services includes the costs of provisioning mobile services, which is primarily our customers' voice, messaging, data usage
provided by our Network Operators, and the costs of providing mobile phone hardware, which is the cost of mobile phone devices and SIM cards sold to ourcustomers, order fulfillment related expenses, and inventory write-downs. Other Services
	Cost of revenues for other services primarily includes the costs for provisioning high speed Internet access, which is comprised of network access fees and
software licenses and the costs of providing hardware. Hardware costs are comprised of network routers sold to our customers, order fulfillment related expenses,inventory write-downs and fees paid to third-party service providers primarily for printing services in connection with billing services to ISPs.
		38

Table of Contents Domain Services Wholesale Domain Service
	Cost of revenues for domain registrations represents the amortization of registry and accreditation fees on a basis consistent with the recognition of revenues
from our customers, namely rateably over the term of provision of the service. Registry fees, the primary component of cost of revenues, are paid in full when the domainis registered, and are initially recorded as prepaid domain registry fees. This accounting treatment reasonably approximates a recognition pattern that corresponds withthe provision of the services during the period. Market development funds that do not represent a payment for distinct goods or services provided by the Company,and thus do not meet the criteria for revenue recognition under ASU 2014-09, 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 of related to hosted email and
fees paid to third-party hosting services. Fees payable for trust certificates are amortized on a basis consistent with the provision of service, generally one year, whileemail 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 sites, Hover.com and the eNom branded sites, include the
amortization of registry fees on a basis consistent with the recognition of revenues from our customers, namely rateably 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 nameintangible assets. Payments for domain registrations are payable for the full term of service at the time of activation of service and are recorded as prepaid domainregistry fees and are expensed rateably over the renewal term.

		39

Table of Contents 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:

(Dollar amounts in thousands of U.S. dollars)		For the Three Months Ended June 30,	For the Six Months Ended June 30,
			2020			2019		2020				2019

Network Access Services:
Mobile Services		$		8,660 $	10,806 $	18,517 $	21,549
Other Services				1,665					956	3,381	2,025
Total Network Access Services				10,325	11,762	21,898	23,574

Domain Services:
Wholesale
Domain Services				36,354	37,817	72,823	72,656
Value Added Services				762					738	1,547	1,531
	Total Wholesale			37,116	38,555	74,370	74,187

Retail				4,219	4,409	8,453	8,768
Portfolio				130					147	257		276
Total Domain Services				41,465	43,111	83,080	83,231

Network Expenses:
Network, other costs				2,485	2,385	4,901	4,780
Network, depreciation and amortization costs				3,356	2,352	6,587	4,327
Network, impairment				1,525	-			1,525		-
				7,366	4,737	13,013	9,107

		$		59,156 $	59,610 $					117,991 $	115,912
(Decrease) increase over prior period		$		(454)	$			2,079
(Decrease) increase - percentage				-1%				2%

	The following table presents our cost of revenues, as a percentage of total cost of revenues for the periods presented:

		For the Three Months Ended June 30,	For the Six Months Ended June 30,
			2020			2019		2020				2019

Network Access Services:
Mobile Services				15%					18%	16%		18%
Other Services				3%					2%	3%		2%
Total Network Access Services				18%					20%	19%		20%

Domain Services:
Wholesale
Domain Services				64%					64%	63%		63%
Value Added Services				1%					1%	1%		1%
	Total Wholesale			65%					65%	64%		64%

Retail				7%					7%	7%		8%
Portfolio				0%					0%	0%		0%
Total Domain Services				72%					72%	71%		72%

Network Expenses:
Network, other costs				4%					4%	4%		4%
Network, depreciation and amortization costs				6%					4%	6%		4%
				10%					8%	10%		8%

				100%					100%	100%		100%

Total cost of revenues for the three months ended June 30, 2020, decreased by $0.4 million, or 1%, to $59.2 million from $59.6 million in the three months ended June 30,2019. The three-month decrease was driven by $2.1 million of reduced costs attributable to our Mobile Services brands. As discussed above in the Net Revenue section,Ting Mobile and Roam Mobility were impacted by loss of mobile subscribers and reduced usage related to COVID-19 when compared to the three months ended June30, 2019. Additionally, further decreases in domain name services costs of $1.6 million, related to continued erosion in Wholesale and Retail domain registrations by non-core customer primarily from our existing Domain Services brands, namely eNom. These decreases were offset by increased network expenses from continued Fibernetwork expansion as well as a $1.5 million impairment related to Ting TV, a product under development for Ting Fiber that was discontinued. Additional increasesin Fiber access costs of $0.7 million, driven by both our recent first quarter acquisition of Cedar as well as through the expansion of our existing Ting Internet footprint. Total cost of revenues for the six months ended June 30, 2020, increased by $2.1 million, or 2%, to $118.0 million from $115.9 million in the six months ended June 30, 2019.The six-month increase was driven by increased network expenses from continued Fiber network expansion as well as a $1.5 million impairment related to Ting TV, aproduct under development for Ting Fiber that was discontinued. Additional increases in Fiber access costs of $1.4 million, driven by both our recent first quarteracquisition of Cedar as well as through the expansion of our existing Ting Internet footprint. These increases were offset by $3.0 million of reduced costs attributable toour Mobile Services brands. As discussed above in the Net Revenue section, Ting Mobile and Roam Mobility were impacted by loss of mobile subscribers and reducedusage related to COVID-19 when compared to the three months ended June 30, 2019. Additionally, there were further decreases in domain name services costs of $0.2

million, related to continued erosion in Wholesale and Retail domain registrations by non-core customers primarily from our existing Domain Services brands, namelyeNom. Prepaid domain registration and other Internet services fees as of June 30, 2020 increased by $5.0 million, or 5%, to $114.2 million from $109.2 million at December31, 2019 primarily due to current period domain name registration and annual service renewals.

		40

Table of Contents Network Access Services Mobile Services Cost of revenues from mobile phone equipment and services for the three months ended June 30, 2020, as compared to the three months ended June 30, 2019, decreasedby $2.1 million or 20% to $8.7 million. This decrease reflects a decline in mobile service costs, which decreased by $3.0 million compared to June 30, 2019, to $6.1 million.Ting Mobile accounts for $2.4 million of this decrease, followed by Roam Mobility at $0.6 million of the total decrease. The decline in service costs of $2.4 million forTing Mobile was primarily driven by a decline in mobile subscribers and reduced usage related to the COVID-19 pandemic; which attributed to a decrease in costs of$1.7 million. Additionally, the decline in Ting Mobile service costs included reduced minimum commitment charges with network operators, which decreased by $0.7million as compared to the three months ended June 30, 2019. The decline in service costs of $0.6 million attributable to Roam Mobility was entirely related to COVID-19and related shut-down costs. As at June 30, 2020, the Company shut down the Roam Mobility brands and related businesses as a result of lack of demand for SIM-enabled roaming services due to lack of business and leisure travel caused by the pandemic. Costs from the sale of mobile hardware and related accessories increasedby $0.9 million compared to June 30, 2019, to $2.5 million. The increase in device costs was primarily driven by strong sales and refreshed product mix for devicescompared to the three months ended June 30, 2019. A portion of this increase is related to Roam Mobility, attributable to an increase of $0.2 million in device costs. Thisis a result of write-off of SIM card inventory upon shut down of the Roam Mobility brands on June 30, 2020. Cost of revenues from mobile phone equipment and services for the six months ended June 30, 2020, as compared to the six months ended June 30, 2019, decreased by$3.0 million or 14% to $18.5 million. The decrease reflects a decline in mobile service costs, which decreased by $4.0 million compared to June 30, 2019, to $14.1 million.Ting Mobile accounts for $3.0 million of this decrease, followed by Roam Mobility at $1.0 million of the total decrease. The decline in service costs of $3.0 million forTing Mobile was primarily driven by a decline in minimum commitment charges with network operators, which decreased by $1.7 million as compared to the six monthsended June 30, 2019. Additionally, the remaining decline in Ting Mobile service costs was driven by a decline in mobile subscribers and reduced usage related to theCOVID-19 pandemic. This was attributable to a decrease in costs of $1.3 million. The decline in service costs of $1.0 attributable to Roam Mobility was entirely related toCOVID-19 and related shut-down costs. Costs from the sale of the mobile hardware and related accessories increased by $1.0 million compared to June 30, 2019, to$4.4 million. The increase in device costs was primarily driven by strong sales and refreshed product mix for devices compared to the six months ended June 30, 2019. Aportion of this increase is related to Roam Mobility, attributable to an increase of $0.2 million in device costs. This is a result of write-off of SIM card inventory uponshut down of the Roam Mobility brands on June 30, 2020. Other Services During the three months ended June 30, 2020, costs related to provisioning high speed Internet access and billing solutions increased $0.7 million or 70%, to $1.7 millionas compared to $1.0 million during three months ended June 30, 2019. The increase in costs were primarily driven by increased direct costs and bandwidth costs relatedto the continued expansion of the Ting Fiber network, for both existing towns and cities as well as those acquired via the Cedar acquisition. During the six months ended June 30, 2020, costs related to provisioning high speed Internet access and billing solutions increased $1.4 million or 70%, to $3.4 million ascompared to $2.0 million during six months ended June 30, 2019. The increase in costs were primarily driven by increased direct costs and bandwidth costs related to thecontinued expansion of the Ting Fiber network, for both existing towns and cities as well as those acquired via the Cedar acquisition. Domain Services Wholesale Domain Service Costs for Wholesale domain services for the three months ended June 30, 2020 decreased by $1.4 million to $36.4 million, when compared to the three monthsended June 30, 2019. This was primarily driven by a $2.0 million decrease in wholesale domain services costs driven by the erosion in registrations by non-corecustomers for our eNom and Ascio brands. This decrease on eNom and Ascio was offset by increased Wholesale domain service costs of $0.5 million from our otherdomain services brands, namely OpenSRS and EPAG. This offsetting increase is a result of increased domains under management for these brands associated with anuptick in registrations during the second quarter of 2020 in connection with COVID-19. As more businesses establish an online presence during this time, we have seengrowth from large volume resellers across these brands. This has had a marginal impact on costs in the current period and will have a carryforward impact in subsequentperiods as costs are recognized from previously deferred billed costs. Costs for Wholesale domain services for the six months ended June 30, 2020 increased by $0.1 million to $72.8 million, when compared to the six months ended June 30,2019. This was primarily driven by a $3.5 million decrease in wholesale domain services costs driven by the erosion in registrations by non-core customers for our eNombrand. This decrease on eNom was offset by increased Wholesale domain service costs of $3.7 million from our other domain services brands, namely OpenSRS, EPAGand Ascio. The offsetting increase is largely a result of the prior year acquisition of Ascio, where Ascio costs now represent a full two quarters compared to the stubperiod of attributable costs during the six months ended June 30, 2019. To a lesser extent any residual increase was a result of increased domains under management forOpenSRS as a result of COVID-19 impacts discussed above. Value-Added Services Costs for wholesale value-added services for the three months ended June 30, 2020 remained flat at $0.8 million, when compared to the three months ended June 30,2019. Costs for wholesale value-added services for the six months ended June 30, 2020 remained flat at $1.5 million, when compared to the six months ended June 30, 2019. Retail Costs for retail for the three months ended June 30, 2020 decreased by $0.2 million, to $4.2 million as compared to the three months ended June 30, 2019. The decreasewas a result of an overall declining volume of transactions related to the eNom retail brands. Costs for retail for the six months ended June 30, 2020 decreased by $0.3 million, to $8.5 million as compared to the six months ended June 30, 2019. The decrease was aresult of an overall declining volume of transactions related to the eNom retail brands. Portfolio Costs for portfolio for the three months ended June 30, 2020 remained flat at $0.1 million when compared to the three months ended June 30, 2019. In the fourth quarter of2019, the Company disposed of its entire domain portfolio, excluding surname domains used in the Realnames email service. The Company expects portfolio cost ofrevenue to materially decline in Fiscal 2020.

Costs for portfolio for the six months ended June 30, 2020 remained flat at $0.3 million when compared to the six months ended June 30, 2019. In the fourth quarter of2019, the Company disposed of its entire domain portfolio, excluding surname domains used in the Realnames email service. The Company expects portfolio cost ofrevenue to materially decline in Fiscal 2020. Network Expenses Network costs for the three months ended June 30, 2020 increased by $2.7 million to $7.4 million when compared to the three months ended June 30, 2019. The three-month increase was driven by depreciation as a result of the expansion of the Company’s increased network infrastructure associated with the continuing expansion ofthe Ting Fiber footprint as well as a $1.5 million impairment related to Ting TV, a product under development for Ting Fiber that was discontinued in the current period. Network costs for the six months ended June 30, 2020 increased by $3.9 million to $13.0 million when compared to the six months ended June 30, 2019. The six-monthincrease was driven by depreciation as a result of the expansion of the Company’s increased network infrastructure associated with the continuing expansion of theTing Fiber footprint as well as a $1.5 million impairment related to Ting TV, a product under development for Ting Fiber that was discontinued in the current period.

Table of Contents 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 expenses include customer acquisition costs, advertising and other promotionalcosts.
	(Dollar amounts in thousands of U.S. dollars)
		For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020		2019		2020				2019
	Sales and marketing	$		9,218 $		8,856 $	18,203 $	17,597
	Increase over prior period	$			362	$				606
	Increase - percentage				4%					3%
	Percentage of net revenues				11%					11%	11%	11%

	Sales and marketing expenses for the three months ended June 30, 2020 increased by $0.4 million, or 4%, to $9.2 million as compared to the three months ended
June 30, 2019. This three-month increase primarily related to a $0.7 million increase in people costs driven by both the acquisition of Cedar in the first quarter of 2020 ,which attributed to this increase $0.4 million of additional costs, as well as an incremental $0.3 million related to an expanded Product Management personnel across ourTing Mobile & Internet teams. Stock-based compensation expenses also increased $0.1 million to attract and retain labor. The overall increase in sales and marketingexpense was partially offset by a decrease in other marketing related expenses of $0.4 million.
	Sales and marketing expenses for the six months ended June 30, 2020 increased by $0.6 million, or 3%, to $18.2 million as compared to the six months ended
June 30, 2019. This six-month increase primarily related to a $1.4 million increase in people costs driven by the acquisition of Cedar in the first quarter of 2020, inclusionof a full two quarters of people costs related to workforce acquired in the Ascio acquisition on March 18, 2019, as well as expanded Product Management personnel asdiscussed above. Stock-based compensation expenses also increased $0.3 million in 2020 to attract and retain labor. The overall increase in sales and marketing expensewas partially offset by a decrease in other marketing and travel related expenses of $0.9 million and $0.2 million, respectively.

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 oftechnology that we use to register domain names, network access services, email, retail, domain portfolio and other Internet services, as well as to distribute our digitalcontent services. Editorial costs relating to the rating and review of the software content libraries are included in the costs of product development. All technicaloperations and development costs are expensed as incurred.

	(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020		2019		2020				2019
	Technical operations and development	$		3,067 $		2,752 $	5,818 $		5,275
	Increase over prior period	$			315	$				543
	Increase - percentage				11%					10%
	Percentage of net revenues				4%					3%	4%	3%

	Technical operations and development expenses for the three months ended June 30, 2020 increased by $0.3 million, or 11% , to $3.1 million when compared to
the three months ended June 30, 2019. The increase in costs relates primarily to increased salaries and benefits driven by an expanding workforce and wage inflationfocused on our shared services and engineering teams, as well as increased spending related to our cloud migration activities.
	Technical operations and development expenses for the six months ended June 30, 2020 increased by $0.5 million, or 10%, to $5.8 million when compared to the
six months ended June 30, 2019. The increase in costs relates primarily to increased salaries and benefits driven by an expanding workforce and wage inflation focusedon our shared services and engineering teams, as well as increased spending related to our cloud migration activities. Additionally, the six months ended June 30,2020 reflected a full two quarters of people costs related to the workforce acquired in the Ascio acquisition on March 18, 2019, as compared to a stub period of costs inthe six months ended June 30, 2019. 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.
	(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020		2019		2020				2019
	General and administrative	$		5,465 $		4,796 $	10,206 $		9,244
	Increase over prior period	$			669	$				962
	Increase - percentage				14%					10%
	Percentage of net revenues				7%					6%	6%	6%

	General and administrative expenses for the three months ended June 30, 2020 increased by $0.7 million, or 14% to $5.5 million as compared to the three months
ended June 30, 2019. The increase was primarily driven by an increase in people costs of $0.4 million, an increase in foreign exchange expense of $0.6 million, and anincrease in professional fees in connection with the Purchase Agreement with Dish of $0.1 million. These increases in general and administrative expenses was offset bya decrease in facility and transitional costs related to Ascio and eNom of $0.2 million and $0.2 million, respectively.
	General and administrative expenses for the six months ended June 30, 2020 increased by $1.0 million, or 10%, to $10.2 million as compared to the six months
ended June 30, 2019. The increase was primarily driven by an increase in people costs of $0.7 million and an increase in foreign exchange expense of $0.9 million. Theincrease in general and administrative expenses was offset by a decrease in facility and transitional costs related to Ascio and eNom of $0.3 million and $0.3 million,respectively
				42

Table of Contents DEPRECIATION OF PROPERTY AND EQUIPMENT

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020				2019		2020				2019
		Depreciation of property and equipment	$	125 $							134 $	238 $	258
		Decrease over prior period	$		(9)	$			(20)
		Decrease - percentage			(7)%				(8)%
		Percentage of net revenues			0%			0%	0%	0%

		Depreciation costs remained flat for the three months ended June 30, 2020 at $0.1 million when compared to the three months ended June 30, 2019. Depreciation costs remained flat for the six months ended June 30, 2020 at $0.2 million when compared to the six months ended June 30, 2019.
LOSS ON DISPOSAL OF PROPERTY AND EQUIPMENT
		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020				2019		2020				2019
		Loss on disposition of property and equipment	$		- $	- $			- $	-
		Decrease over prior period	$		-	$			-
		Decrease - percentage		N/A					N/A
		Percentage of net revenues			-%	-%			-%	-%

		There were no losses on disposal costs during the three months ended June 30, 2020 and June 30, 2019. There were no losses on disposal costs during the six months ended June 30, 2020 and June 30, 2019.
AMORTIZATION OF INTANGIBLE ASSETS

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020				2019		2020				2019
		Amortization of intangible assets	$	2,504 $							2,251 $	5,451 $	4,117
		Increase over prior period	$		253	$			1,334
		Increase - percentage			11%				32%
		Percentage of net revenues			3%			3%	3%	3%

		Amortization of intangible assets for the three months ended June 30, 2020 increased by $0.3 million to $2.5 million as compared to the three months ended June
30, 2019. The increase is driven by a $0.3 million increase in amortization related to FreedomPop customer acquisition that closed in July 2019. Network rights, brand andcustomer relationships acquired in connection with the following acquisitions are amortized on a straight-line basis over a range of two to seven years: eNom in January2017, Roam Mobility brands in September 2017, Ascio in March 2019, FreedomPop in July 2019, and Cedar in January 2020. As discussed above, the balance of theRoam Mobility brands was fully impaired as at June 30, 2020 as part of shut down of the Roam brands. This is reflected below in the impairment of definite life intangibleassets of $1.4 million.
		Amortization of intangible assets for the six months ended June 30, 2020 increased $1.3 million to $5.5 million as compared to the six months ended June 30,
2019. The increase is driven by a full two quarters of amortization related to the acquisition of Ascio of $0.4 million, amortization of $0.3 million related to the priorquarter acquisition of Cedar and $0.6 million in amortization related to FreedomPop customer acquisition that closed in July 2019. Network rights, brand and customerrelationships acquired in connection with the following acquisitions are amortized on a straight-line basis over a range of two to seven years: eNom in January2017, Roam Mobility brands in September of 2017, Ascio in March of 2019, FreedomPop in July 2019, and Cedar in January 2020. As discussed above, the balance of theRoam Mobility brands was fully impaired as at June 30, 2020 as part of shut down of the Roam brands. This is reflected below in the impairment of definite life intangibleassets of $1.4 million. IMPAIRMENT OF DEFINITE LIFE INTANGIBLE ASSETS
					For the Three Months Ended June
(Dollar amounts in thousands of U.S. dollars)						30,	For the Six Months Ended June 30,
					2020		2019				2020		2019
Impairment of definite life intangible assets	$					1,431 $	- $			1,431 $			-
Increase over prior period	$					1,431	$			1,431
Increase - percentage						N/A%				N/A%
Percentage of net revenues						2%	-%				1%		-%
Impairment of definite life intangible assets for the three and six months ended June 30, 2020 increased by $1.4 million as compared to the three and six monthsended June 30, 2019. The increase is driven by the write-off of customer relationships acquired in connection with our Roam Mobility Brands. As discussed above,Roam Mobility saw a decline in mobile subscribers and reduced usage related to the COVID-19 pandemic. As at June 30, 2020, the Company decided to shut down theRoam Mobility brands and related business as a result of this lack of demand for SIM-enabled roaming services due to the continued decrease of both business andleisure travel caused by the pandemic. As part of that shut down, the associated customer relationships previously acquired were written off in period. 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 neutralizesome of the impact of foreign currency exchange movements. Accordingly, we enter into foreign exchange contracts to mitigate the exchange rate risk on portions of ourCanadian dollar exposure.

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020				2019		2020				2019
		Loss (gain) on currency forward contracts	$	(381) $							(31) $	60 $	(110)
		Decrease over prior period	$	(350)		$			170
		Decrease - percentage		1,129%					155%

Percentage of net revenues	0%	0%	0%	0%

The Company recorded a net gain of $0.4 million on the change in fair value of outstanding contracts as well as realized on matured contracts during the three
						months ended June 30, 2020.
The Company recorded a net loss of $0.1 million on the change in fair value of outstanding contracts as well as realized on matured contracts during the six
						months ended June 30, 2020.
At June 30, 2020, our balance sheet reflects a derivative instrument asset of $1.7 million and a liability of $0.7 million as a result of our existing foreign exchange
						contracts. Until their respective maturity dates, these contracts will fluctuate in value in line with movements in the Canadian dollar relative to the U.S. dollar.
					43

Table of Contents OTHER INCOME (EXPENSES)

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020			2019		2020				2019
		Other income (expense), net	$	(931) $			(1,314) $	(2,168) $	(2,286)
		Increase over prior period	$	383		$		118
		Increase - percentage		(29)%				(5)%
		Percentage of net revenues			1%		2%	1%	1%

		Other expenses during the three months ended June 30, 2020 decreased by $0.4 million when compared to the three months ended June 30, 2019. This
was primarily due to lower interest incurred on our credit facility with the majority of the borrowings on the credit facility to support the build-out of the Ting Fibernetwork. Other expense consists primarily of the interest we incur in connection with our Amended 2019 Credit Facility. The interest incurred primarily relates to our loanbalances obtained to fund the acquisition of eNom, Ascio and Cedar and funding for expenditures associated with the Company’s Fiber to the Home program.
		Other expenses during the six months ended June 30, 2020 decreased by $0.1 million when compared to the six months ended June 30, 2019. This was primarily
due to lower interest incurred on our credit facility with the majority of the borrowings on the credit facility to support the build-out of the Ting Fiber network. Otherexpense consists primarily of the interest we incur in connection with our Amended 2019 Credit Facility. The interest incurred primarily relates to our loan balancesobtained to fund the acquisition of eNom, Ascio and Cedar and funding for expenditures associated with the Company’s Fiber to the Home program. INCOME TAXES
		The following table presents our provision for income taxes for the periods presented:

		(Dollar amounts in thousands of U.S. dollars)	For the Three Months Ended June 30,	For the Six Months Ended June 30,
				2020			2019		2020				2019
		Provision for income taxes	$	449 $						1,819 $	1,550 $	3,076
		Decrease in provision over prior period	$	(1,370)		$		(1,526)
		Decrease - percentage		(75)%				(50)%
		Effective tax rate			74%		41%	34%	36%

		We operate in various tax jurisdictions, and accordingly, our income is subject to varying rates of tax. Losses incurred in one jurisdiction cannot be used to
offset income taxes payable in another jurisdiction. Our ability to use income tax loss carry forwards and future income tax deductions is dependent upon our operationsin the tax jurisdictions in which such losses or deductions arise. Income taxes are computed using the asset and liability method, under which deferred tax assets andliabilities are determined based on the difference between the financial statement carrying values and tax base of assets and liabilities using enacted tax rates in effect forthe year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amountexpected to be realized.
		For the three months ended June 30, 2020, we recorded an income tax expense of $0.4 million on income before income taxes of $0.6 million, using an estimated
effective tax rate for Fiscal 2020 adjusted for certain minimum state taxes as well as the inclusion of a $0.1 million tax recovery related to ASU 2016-09, which requires allexcess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense. Our effective tax rate for the threemonths ended June 30, 2020 is also adversely affected by discrete losses of $3.7 million related to Ting TV and Roam Mobility the tax benefit of which has only beenpartially recognized. Comparatively, for the three months ended June 30, 2019, we recorded an income tax expense of $1.8 million on income before taxes of $4.4 million,using an estimated effective tax rate for the 2019 fiscal year and reflecting the $0.4 million tax recovery impact related to ASU 2016-09.
		For the six months ended June 30, 2020, we recorded an income tax expense of $1.6 million on income before income taxes of $4.5 million, using an estimated
effective tax rate for Fiscal 2020 adjusted for certain minimum state taxes as well as the inclusion of a $0.2 million tax recovery related to ASU 2016-09, which requires allexcess tax benefits and tax deficiencies related to employee share-based payments to be recognized through income tax expense. Our effective tax rate for the six monthsended June 30, 2020 is also adversely affected by discrete losses of $3.7 million related to Ting TV and Roam Mobility the tax benefit of which has only been partiallyrecognized. Comparatively, for the six months ended June 30, 2019, we recorded an income tax expense of $3.1 million on income before taxes of $8.5 million, using anestimated effective tax rate for the 2019 fiscal year and reflecting the $0.7 million tax recovery impact related to ASU 2016-09.
		In assessing the realizability of deferred tax assets, management 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 temporarydifferences become deductible. Management projected future taxable income, uncertainties related to the industry in which the Company operates, and tax planningstrategies in making this assessment.
		We recognize accrued interest and penalties related to income taxes in income tax expense. We did not have significant interest and penalties accrued at June
30, 2020 and December 31, 2019, 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. Sinceadjusted EBITDA is a non-GAAP financial performance measure, our calculation of adjusted EBITDA may not be comparable to other similarly titled measures of othercompanies; and should not be considered in isolation, as a substitute for, or superior to measures of financial performance prepared in accordance with GAAP. Becauseadjusted EBITDA is calculated before recurring cash charges, including interest expense and taxes, and is not adjusted for capital expenditures or other recurring cashrequirements of the business, it should not be considered as a liquidity measure. See the Consolidated Statements of Cash Flows included in the attached financialstatements. Non-GAAP financial measures do not reflect a comprehensive system of accounting and may differ from non-GAAP financial measures with the same orsimilar 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 providingthe relevant disclosure of the items excluded in the calculation of adjusted EBITDA to net income based on GAAP, which should be considered when evaluating theCompany'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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Table of Contents
	Our adjusted EBITDA definition excludes depreciation, amortization of intangible assets, income tax provision, interest expense (net), accretion of contingent
consideration, stock-based compensation, asset impairment, gains and losses from unrealized foreign currency transactions and infrequently occurring items. Gains andlosses from unrealized foreign currency transactions removes the unrealized effect of the change in the mark-to-market values on outstanding unhedged foreigncurrency 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:

	Reconciliation of Net income to Adjusted EBITDA		Three Months Ended June 30,	Six Months Ended June 30,
	(In Thousands of US Dollars)		2020			2019		2020					2019
	(unaudited)		(unaudited)			(unaudited)		(unaudited)						(unaudited)

	Net income for the period	$			157 $	2,616 $					2,991 $	5,415
	Depreciation of property and equipment				3,155	2,172					6,145	4,097
	Impairment of property and equipment				1,525	-					1,525	-
	Amortization of intangible assets				2,830	2,565					6,131	4,605
	Impairment of definite life intangible assets				1,431	-					1,431	-
	Interest expense, net				846	1,314					1,996	2,286
	Accretion of contingent consideration				85	-					172	-
	Provision for income taxes				449	1,819					1,550	3,076
	Stock-based compensation				847	685					1,648	1,210
	Unrealized loss (gain) on change in fair value of forward contracts				(436)	(70)					(88)	(188)
	Unrealized loss (gain) on foreign exchange revaluation of foreigndenominated monetary assets and liabilities
					441	(162)					399	(490)
	Acquisition and other costs1				845	547					956	906

	Adjusted EBITDA	$			12,175 $	11,486 $	24,856 $	20,917

1Acquisition and other costs represents transaction-related expenses, transitional expenses, such as duplicative post-acquisition expenses, primarily related toour acquisition of eNom in January 2017, Ascio in March 2019, Cedar in January 2020, the shut-down of Roam Mobility in June of 2020 and the costs associatedwith various DISH agreements executed in August of 2020. Expenses include severance or transitional costs associated with department, operational or overallcompany restructuring efforts, including geographic alignments.

	Adjusted EBITDA increased by $0.7 million, or 6% to $12.2 million for the three months ended June 30, 2020 when compared to the three months ended June 30,
2019. The increase in adjusted EBITDA from period-to-period was primarily driven by an increased contribution from Ting Fiber. The overall increase in EBITDA waspartially offset by decreased contribution from the erosion of wholesale and retail registrations from our eNom brand as well as lower contribution from Ting Mobile andRoam Mobility, related to a decreasing subscriber base and lower usage related to COVID-19.
	Adjusted EBITDA increased by $4.0 million, or 19% to $24.9 million for the six months ended June 30, 2020 when compared to the six months ended June 30,
2019. The increase in adjusted EBITDA from period-to-period was primarily driven by an increased contribution from Ascio, which is the result of increased operatingcost synergies realized during the first two quarters of 2020, as well as an increased contribution from Ting Fiber. The overall increase in EBITDA was partially offset bydecreased contribution from the erosion of wholesale and retail registrations from our eNom brand as well as lower contribution from Ting Mobile and Roam Mobility,related to a decreasing subscriber base and lower usage related to COVID-19. 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 begun applying hedge
accounting for the majority of the contracts we need to meet our Canadian dollar requirements on a prospective basis.
	The following table presents other comprehensive income for the periods presented:

	(Dollar amounts in thousands of U.S. dollars)								For the Three Months Ended June 30,	For the Six Months Ended June 30,
										2020		2019					2020	2019
	Other comprehensive income (loss)								$	1,314 $					320 $	123 $			930
	Increase over prior period								$	994					$	(807)
	Increase - percentage									311%						(87)%
	Percentage of net revenues									2%					0%	0%			1%

	The impact of the fair value adjustments on outstanding hedged contracts for the three months ended June 30, 2020 was a gain in OCI of $1.1 million as
compared to a gain of $0.2 million for the three months ended June 30, 2019.

	The net amount reclassified to earnings during the three months ended June 30, 2020 was a loss of $0.2 million compared to a loss of $0.1 million during the
three months ended June 30, 2019.
	The impact of the fair value adjustments on outstanding hedged contracts for the six months ended June 30, 2020 was a loss in OCI of $0.1 million as compared
to a gain of $0.8 million for the six months ended June 30, 2019.

	The net amount reclassified to earnings during the six months ended June 30, 2020 was a loss of $0.2 million compared to a loss of $0.1 million during the six
months ended June 30, 2019.

		45

Table of Contents LIQUIDITY AND CAPITAL RESOURCES
	As of June 30, 2020, our cash and cash equivalents balance decreased $11.5 million when compared to December 31, 2019. Our principal uses of cash were $22.1
million for the continued investment in property and equipment, $8.8 million for the Acquisition of Cedar, $3.3 million in stock repurchases, and $0.4 million of othercosts, including tax payment associated with stock option exercises and loan payable costs. These uses of cash were offset by cash provided by operating activities of$23.0 million.
Amended 2019 Credit Facility
	On June 14, 2019, the Company and its wholly-owned subsidiaries, Tucows.com Co., Ting Fiber, Inc., Ting Inc., Tucows (Delaware) Inc. and Tucows (Emerald),
LLC, entered into an Amended and Restated Senior Secured Credit Agreement with RBC, as administrative agent, and lenders party thereto (collectively with RBC, the“Lenders”) under which the Company has access to an aggregate of up to $240 million in funds, inclusive of a $60 million accordion facility. The Amended 2019 CreditFacility replaced a secured Credit Agreement dated January 20, 2017 with Bank of Montreal, RBC and Bank of Nova Scotia (as amended, the “2017 Amended CreditFacility”).

	On November 27, 2019, the Company entered into Amending Agreement No. 1 to the Amended and Restated Senior Secured Credit Agreement (collectively
with the Amended and Restated Senior Secured Credit Agreement, the “Amended 2019 Credit Facility”) to amend certain defined terms in connection with the Cedaracquisition.

	In connection with the Amended 2019 Credit Facility, the Company incurred an additional $0.3 million of fees paid to lenders and $0.2 million of legal fees
related to the debt issuance. Of these fees, $0.4 million are debt issuance costs, which have been reflected as a reduction to the carrying amount of the loan payable andwill be amortized over the term of the credit facility agreement and $0.1 million have been recorded in General and administrative expenses.

	The obligations of the Company under the Amended 2019 Credit Agreement are secured by a first priority lien on substantially all of the personal property and
assets of the Company and has a four-year term.

Other Credit Facilities
	Prior to the Company entering into the Amended 2019 Credit Facility and the 2017 Amended Credit Facility, the Company had credit agreements (collectively
the “Prior Credit Facilities”) with BMO, which provided the Company with continued access to a treasury risk management facility and a credit card facility. Allremaining credit facilities under the 2017 Amended Credit Facility and the Prior Credit Facilities have been terminated.
	The treasury risk management facility under the Prior Credit Facilities 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 Prior Credit Facilities, the Company may enterinto such agreements at market rates with terms not to exceed 18 months. As of June 30, 2020, the Company held contracts in the amount of $52.1 million to trade U.S.dollars in exchange for Canadian dollars.
		46

Table of Contents Cash Flow from Operating Activities
Net cash inflows from operating activities during the six months ended June 30, 2020 was $23.0 million, an increase of 44% when compared to the six months ended June30, 2019.
Net income, after adjusting for non-cash charges, during the six months ended June 30, 2020 was $19.1 million, an increase of 15% when compared to the prior year. Netincome included non-cash charges and recoveries of $19.1 million such as depreciation, amortization, stock-based compensation, deferred income taxes, excess taxbenefits on stock-based compensation, other income, unrealized gains on currency forward contracts, and disposal of domain names. In addition, changes in ourworking capital provided $3.9 million. Positive contributions of $12.2 million from movements in deferred revenue, accounts receivable, accounts payable, accruedliabilities, inventory, accreditation fees payable, customer deposits, and income taxes recoverable were offset by $8.3 million utilized in changes from prepaid domainname fees, and prepaid expenses and deposits. Cash Flow from Financing Activities Net cash outflows from financing activities during the six months ended June 30, 2020 totaled $3.6 million as compared to cash inflows of $34.8 million during the sixmonths ended June 30, 2019. Total cash outflows of $3.6 million were driven by $3.3 million related to the stock repurchases, in addition to a $0.4 million outflow for thepayment of tax obligations resulting from the net exercise of stock options and loan payable costs. These cash outflows were offset by minor cash inflows related to theproceeds received on exercise of stock options.

Cash Flow from Investing Activities Investing activities during the six months ended June 30, 2020 used net cash of $30.9 million as compared to using $51.4 million during the six months ended June 30,2019. Cash outflows of $8.8 million related to the acquisition of Cedar, in addition to $22.1 million invested in property and equipment, primarily to support the continuedexpansion of our fiber footprint. The Company continues to invest in our existing Ting Towns of Centennial, CO, Charlottesville, VA, Fuquay-Varina, NC, Holly Springs,NC, and Sandpoint, ID as well ramping construction in Roaring Fork, CO, Rolesville, NC, and Wake Forest, NC, as we seek to extend both our current network andexpand to new towns. We expect our capital expenditures on building and expanding our fiber network to continue to increase during Fiscal 2020. Based on our operations, we believe that our cash flow from operations will be adequate to meet our anticipated requirements for working capital, capital expendituresand our loan repayments for at least the next 12 months. We may need additional funds or seek other financing arrangements to facilitate more rapid expansion, develop new or enhance existing products or services, respondto competitive pressures or acquire or invest in complementary businesses, technologies, services or products. We may also evaluate potential acquisitions of otherbusinesses, products and technologies. We currently have no commitments or agreements regarding the acquisition of other businesses. If additional financing isrequired, we may need additional equity or debt financing and any additional financing may be dilutive to existing investors. We may not be able to raise funds onacceptable terms, or at all. Off Balance Sheet Arrangements As of June 30, 2020 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, 2019, we disclosed our contractual obligations. As of June 30, 2020, other than the items mentionedabove, there have been no other material changes to those contractual obligations outside the ordinary course of business.
		47

Table of Contents 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 areincurred in Canadian dollars. Our financial results could be affected by factors such as changes in foreign currency exchange rates or weak economic conditions inforeign 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 arein 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 June 30, 2020.We are also subject to market risk exposure related to changes in interest rates under our Amended 2019 Credit Facility. In an effort to mitigate a portion of our market risk exposure the Company has entered into a pay-fixed, receive-variable interest rate swap with a Canadian charteredbank to limit the potential interest rate fluctuations incurred on its future cash flows related to variable interest payments on the Amended 2019 Credit facility. Thenotional value of the swap was $70 million. 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 andassess 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 foreigncurrency exposure is to manage financial exposure to certain foreign exchange fluctuations with the objective of neutralizing some of the impact of foreign currencyexchange movements. Exchange rates are, however, subject to significant and rapid fluctuations, and therefore we cannot predict the prospective impact of exchangerate fluctuations on our business, results of operations and financial condition. Accordingly, we have entered into foreign exchange forward contracts to mitigate theexchange rate risk on portions of our Canadian dollar exposure.
	As of June 30, 2020, we had the following outstanding foreign exchange forward contracts to trade U.S. dollars in exchange for Canada dollars:

			Weighted average
		Notional amount of U.S.	exchange rate of U.S.
	Maturity date (Dollar amounts in thousands of U.S. dollars)		dollars	dollars	Fair value

	July - September 2020		10,656	1.3227	(273)
	October - December 2020		9,658	1.3227	(247)
	January - March 2021		11,124	1.4283	574
	April - June 2021		9,878	1.4283	507
	July - September 2021		10,782	1.4362	611
		$	52,098	1.3888 $	1,172

	As of June 30, 2020, the Company had $52.1 million of outstanding foreign exchange forward contracts which will convert to $72.4 million Canadian dollars. Of
these contracts, $44.2 million met the requirements for hedge accounting. As of December 31, 2019, the Company held contracts in the amount of $30.5 million to tradeU.S. dollars in exchange for $40.5 million Canadian dollars. Of these contracts, $26.1 million met the requirements for hedge accounting.
	We have performed a sensitivity analysis model for foreign exchange exposure over the three months ended June 30, 2020. 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 inthe 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 ratesin effect during the three months ended June 30, 2020. The sensitivity analysis indicated that a hypothetical 10% adverse movement in foreign currency exchange rateswould result in a decrease in net income for the three months ended June 30, 2020 of approximately $1.0 million, before the effects of hedging. Fluctuations of exchangerates 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 ormitigate 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 financialinstitutions whom we have evaluated as highly creditworthy and commercial paper. Similarly, we enter into our foreign exchange contracts with major banks and financialinstitutions. 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. Interest rate risk
	Our exposure to interest rate fluctuations relate primarily to our Amended 2019 Credit Facility. As of June 30, 2020, we had an outstanding balance of $114.4 million on the Amended 2019 Credit Facility. The Amended 2019 Credit Facility bears a base
interest rate based on borrowing elections by the Company and the Company’s total Funded Debt to EBITDA plus LIBOR. In addition, as discussed above, theCompany entered into a pay-fixed, receive-variable interest rate swap to limit the potential interest rate fluctuations incurred on its future cash flows related to variableinterest payments on the Amended 2019 Credit facility. As of June 30, 2020, the notional amount of the Company's interest rate swap designated as a cash flow hedgewas $70 million. As of June 30, 2020, an adverse change of one percent on the interest rate would have the effect of increasing our annual interest payment on Amended2019 Credit Facility by approximately $0.4 million, assuming that the loan balance as of June 30, 2020 is outstanding for the entire period.
		48

Table of Contents Item 4. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures As required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), management, with the participation of our Chief Executive Officer and ChiefFinancial Officer, evaluated, as of the end of the period covered by this report, the effectiveness of our disclosure controls and procedures as defined in Exchange ActRule 13a-15(e). Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance ofachieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Ourdisclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosurecontrols and procedures as of the end of the period covered by this quarterly report, our Chief Executive Officer and Chief Financial Officer concluded that, as of June30, 2020 our disclosure controls and procedures were effective at the reasonable assurance level. Management’s assessment of disclosure controls and proceduresexcluded consideration of Cedar’s internal control over financial reporting. Cedar was acquired during the first quarter of 2020, and the exclusion is consistent withguidance provided by the SEC staff that an assessment of a recently acquired business may be omitted from management’s report on internal control over financialreporting for up to one year from the date of acquisition, subject to specified conditions. Cedar’s total assets were approximately $17.1 million as June 30, 2020; itsrevenues during the three and six months ended June 30, 2020 were approximately $1.2 million and $2.4 million, respectively. (b) Changes in Internal Control over Financial Reporting There were no changes made in our internal controls over financial reporting during the three months ended June 30, 2020 that have materially affected, or arereasonably likely to materially affect, our internal control over financial reporting. As a result of our acquisition of Cedar, we are in the process of evaluating Cedar’sinternal controls to determine the extent to which modifications to Cedar’s internal controls would be appropriate.

Table of Contents
	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 ouropinion, 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 incursignificant litigation expense and may result in significant diversion of our attention. Item 1A. Risk Factors The following risk factors are provided to update the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K for the yearended December 31, 2019 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. The risks described in this Quarterly Report and in our AnnualReport on Form 10-K and other Quarterly Reports are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that wecurrently deem to be immaterial also may adversely affect our business, financial condition or operating results. Health epidemics, including the recent COVID-19 pandemic, have had, and could in the future have, an adverse impact on our business, operations and financialresults, and the markets and communities in which we and our employees, Mobile Network Operators (“MNOs”), vendors and customers operate. Our business, operations and financial results could be adversely affected by health epidemics, including the recent COVID-19 pandemic, impacting the markets andcommunities in which we and our employees, MNOs, vendors and customers operate. In December 2019, a disease referred to as COVID-19 was reported and has sincespread to many countries worldwide, including the United States and Canada. The ongoing global COVID-19 pandemic has adversely impacted, and may continue to adversely impact, many aspects of our business. With respect to our NetworkAccess business segment, Roam Mobility, our niche prepaid Mobile Services brand that relies on global travel as a key factor in its success, has accounted for themajority of the negative financial impact caused by COVID-19. Ting Mobile, our primary post-paid Mobile Services brand, has experienced a drop in customer datausage and an increased churn rate of low-margin business accounts. We do not know when Ting Mobile customer data usage and business account churn rates willreturn to pre-pandemic levels, if ever, and continued declines and increases, respectively, could harm our Network Access business. Also within our Network Accessbusiness segment, although we have implemented certain smart, reduced-risk installs for our Ting Fiber customers, we do not expect new customer installations to returnto pre-pandemic levels in the near term. A continued decline in new customer growth and installations could harm our Network Access business. In response to the COVID-19 pandemic, many state, local, and foreign governments have put in place, and others in the future may put in place, quarantines, executiveorders, shelter-in-place orders, and similar government orders and restrictions in order to control the spread of the disease. Such orders or restrictions, or the perceptionthat such orders or restrictions could occur, have resulted in business closures, work stoppages, slowdowns and delays, work-from-home policies, travel restrictions,and cancellation or postponement of events, among other effects, that could negatively impact productivity and disrupt our operations and those of our MNOs,vendors and customers. We continue to implement a work-from-home policy for substantially all of our employees, and we may take further actions that alter ouroperations as may be required by federal, state, or local authorities, or which we determine are in our best interests. While most of our operations can be performedremotely, there is no guarantee that we will be as effective while working remotely because our team is dispersed, many employees may have additional personal needsto attend to (such as looking after children as a result of school closures or family who become sick), and employees may become sick themselves and be unable towork. Decreased effectiveness of our team could adversely affect our results due to our inability to meet in person with vendors and service providers, longer timeperiods to provide services related to domain registrations, longer time to respond to Network Access customer service issues, extended timelines for Network Accesscustomer installations and repairs, or other decreases in productivity that could harm our business. The global impact of COVID-19 continues to rapidly evolve, and we will continue to monitor the situation closely. The ultimate impact of the COVID-19 pandemic or asimilar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts on our business, operations, financialresults or the global economy as a whole. While the spread of COVID-19 may eventually be contained or mitigated, there is no guarantee that a future outbreak of this orany other widespread epidemics will not occur, or that the global economy will recover, either of which could seriously harm our business. Risk associated with contingent consideration in the Asset Purchase Agreement with Dish Wireless LLC On August 1, 2020, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Dish Wireless LLC (“DISH”), whereby it sold certainassets of Ting Inc. its wholly owned subsidiary, primarily its customer relationships and inventory. In addition, the Company will be entitled to a 10-year payment streamthat is a function of the revenue generated by the transferred subscribers over the 10-year period. Subscribers are able to accept offers, plans or pricing from DISH. This consideration structure may not prove to be successful or profitable in the long-term to us if the existing subscriber base churns at an above average rate uponacquisition by DISH. Additionally, given DISH controls the revenues and costs incurred associated with the acquired subscribers, there could arise a situation whereprofitability for the subscriber base is diminished either by lower price points or cost inflation. If any of these events occur, our operational performance and financialresults may be adversely affected. Risk associated with sharing the Ting brand with Dish Wireless LLC Included in the Purchase Agreement, the Company grants the purchaser the right to use the name "Ting" and its associated domain name. DISH will use the Ting brandto provision Ting Mobile services, provided by DISH. Contemporaneously, the Company will continue to use the Ting brand with Ting Fiber, the Company's existingFiber Internet service. This could cause a misassociation in the minds of consumers and the market who could associate either Company as the single service providerof both services. Additionally, any actions taken by DISH as part of the transactions contemplated by the Purchase Agreement may impact the Ting brand and byextension - the Ting brand's reputation. These actions could range from poor service quality, bad customer experience, privacy concerns, data breaches, and otherevents that could negatively impact the Ting brand permanently. The Ting brand could then carry negative connotation with consumers and impact our ability tocontinue to grow our Fiber Internet business under the Ting brand. If any of these events occur, our operational performance and financial results, in particular those ofour Fiber Internet business may be adversely affected. Risk that we are unable to meet our minimum commitments with MNO partners for remaining contracts not assigned to DISH
As part of the transactions contemplated by the Purchase agreement, we will reassign MNO partner contracts currently used to facilitate the Ting Mobile MVNObusiness (other than a contract associated with one network operator). The Company will retain customer accounts associated with the excluded MNO provider, andthe minimum revenue commitments under the excluded MNO contract. The Company will be able to continue adding customers under the excluded MNO contractworking with DISH in order to meet the commitment. However, with no direct relationship with the subscriber, the Company may be unable to meet the minimumcommitments with this MNO partner and could incur significant and recurring penalties until such a time that the contract is complete. These penalties wouldnegatively impact our operational performance and financial results if enforced by the MNO.

	50

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

(Dollar amounts in thousands of U.S. dollars, except per share amounts)

					Approximate
				Total Number of	Dollar value of
				Shares	shares that may
				repurchased as		yet be
	Total Number of			part of a publicly	purchased
		Shares	Average Price	announced		under the
Period		Repurchased		Paid per share	program(1)		program
April 1-30, 2020								3,500 $	46.87	70,238 $	36,719
May 1-31, 2020			- $	-	- $	36,719
June 1-30, 2020			- $	-	- $	36,719
(1) On February 12, 2020, the Company announced that its Board has approved a stock buyback program to repurchase up to $40 million of its common stock in theopen market. Purchases are to be made exclusively through the facilities of the NASDAQ Capital Market. The $40 million buyback program commenced on February12, 2020 and is expected to terminate on February 12, 2021. During the three months ended June 30, 2020, the Company repurchased and cancelled 3,500 sharesunder the terms of this program for a total of $0.2 million. During the six months ended June 30, 2020, the Company repurchased and cancelled 70,238 shares underthe terms of this program for a total of $3.3 million. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information None.
	51

Table of Contents Item 6. Exhibits
No.	Description

	Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed with Tucows’ Current Report onForm 8-K, as filed with the SEC on November 29, 2007).
3.1.1
	Articles of Amendment to Fourth Amended and Restated Articles of Incorporation of Tucows Inc. (Incorporated by reference to Exhibit 3.1 filed withTucows’ Current Report on Form 8-K, as filed with the SEC on January 3, 2014).
3.1.2
	Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by reference to Exhibit 3.2 filed with Tucows’ Annual Report on Form 10-K forthe year ended December 31, 2006, as filed with the SEC on March 29, 2007).
3.2
	Amendment No. 1 to Second Amended and Restated Bylaws of Tucows Inc. (Incorporated by Reference to Exhibit 3.3 filed with Tucows’ QuarterlyReport on Form 10-Q for the quarter ended June 30, 2012).
3.3
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 †
	Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within theInline XBRL document)
101.INS
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Management or compensatory contract.
#	Filed herewith.
†	Furnished herewith.

		52

Table of Contents
	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 undersignedthereunto duly authorized.

Date: August 6, 2020		TUCOWS INC.

		By: /s/ ELLIOT NOSS
			Elliot Noss
			President and Chief Executive Officer

		By: /s/ DAVINDER SINGH
		Davinder SinghChief Financial Officer

			(Principal Financial and Accounting Officer)

	53

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 statementsmade, 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 financialcondition, 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 ActRules 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 andhave:
			a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes 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 theeffectiveness 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 fiscalquarter 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 theregistrant'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 likelyto 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 overfinancial reporting.
	Date August 6,2020
				/s/ Elliot Noss
				Elliot Noss
				President and Chief Executive Officer

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 statementsmade, 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 financialcondition, 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 ActRules 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 andhave:
			a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, toensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, 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 oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes 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 theeffectiveness 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 fiscalquarter 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 theregistrant'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 likelyto 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 overfinancial reporting.

	Date August 6,2020			/s/ Davinder Singh
				Davinder Singh
				Chief Financial Officer

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 June 30, 2020 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 theCompany.


			Date: August 6, 2020			/s/ Elliot Noss
					Elliot Noss
					President and Chief Executive Officer

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 June 30, 2020 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 18U.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 theCompany.


			Date: August 6, 2020			/s/ Davinder Singh
					Davinder Singh
					Chief Financial Officer