Document_And_Entity_Informatio
Document And Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 6-May-15 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TUCOWS INC /PA/ | |
Document Type | 10-Q | |
Current Fiscal Year End Date | -19 | |
Entity Common Stock, Shares Outstanding | 11,019,983 | |
Amendment Flag | FALSE | |
Entity Central Index Key | 909494 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Accelerated Filer | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
Consolidated_Balance_Sheets_Cu
Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $13,678,191 | $8,271,377 |
Accounts receivable, net of allowance for doubtful accounts of $121,770 as of March 31, 2015 and $125,766 as of December 31, 2014 | 7,119,785 | 6,789,685 |
Inventory | 574,119 | 393,774 |
Prepaid expenses and deposits | 5,085,514 | 3,697,292 |
Prepaid domain name registry and ancillary services fees, current portion | 46,107,333 | 44,614,858 |
Other assets (note 5) | 8,199,000 | |
Deferred tax asset, current portion (note 9) | 3,040,483 | 2,498,196 |
Income taxes recoverable | 1,772 | 997 |
Total current assets | 75,607,197 | 74,465,179 |
Prepaid domain name registry and ancillary services fees, long-term portion | 11,735,134 | 11,764,765 |
Property and equipment | 5,346,070 | 1,609,787 |
Deferred tax asset, long-term portion (note 9) | 5,067,090 | 4,880,423 |
Intangible assets (note 7) | 14,886,625 | 14,202,585 |
Goodwill (note 7) | 21,055,143 | 18,873,127 |
Total assets | 133,697,259 | 125,795,866 |
Current liabilities: | ||
Accounts payable | 3,883,370 | 3,579,920 |
Accrued liabilities | 4,105,110 | 3,941,549 |
Customer deposits | 4,325,284 | 4,461,727 |
Derivative instrument liability, (note 6) | 2,139,268 | 1,115,805 |
Deferred rent, current portion | 5,317 | |
Loan payable (note 8) | 3,500,000 | |
Deferred revenue, current portion | 57,630,217 | 55,495,566 |
Accreditation fees payable, current portion | 519,432 | 466,201 |
Income taxes payable (note 9) | 1,136,023 | 473,480 |
Total current liabilities | 77,244,021 | 69,534,248 |
Deferred revenue, long-term portion | 15,659,049 | 15,610,753 |
Accreditation fees payable, long-term portion | 126,039 | 128,243 |
Deferred rent, long-term portion | 85,069 | 92,878 |
Other liabilities (note 10) | 1,545,832 | |
Deferred tax liability, long-term portion (note 9) | 5,032,177 | 4,787,351 |
Redeemable non-controlling interest (note 4) | 3,000,000 | |
Stockholders' equity (note 14) | ||
Preferred stock - no par value, 1,250,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock - no par value, 250,000,000 shares authorized;10,996,733 shares issued and outstanding as of March 31, 2015 and 11,329,732 shares issued and outstanding as of December 31, 2014 | 13,975,005 | 14,130,059 |
Additional paid-in capital | 22,318,640 | 29,090,058 |
Deficit | -4,121,340 | -6,955,283 |
Accumulated other comprehensive income (loss) | -1,167,233 | -622,441 |
Total stockholders' equity | 31,005,072 | 35,642,393 |
Total liabilities and stockholders' equity | $133,697,259 | $125,795,866 |
Consolidated_Balance_Sheets_Cu1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts (in Dollars) | $121,770 | $125,766 |
Preferred stock, shares authorized | 1,250,000 | 1,250,000 |
Preferred stock - shares issued | 0 | 0 |
Preferred stock - shares outstanding | 0 | 0 |
Preferred stock - no par value (in Dollars per share) | $0 | $0 |
Common stock shares authorized | 250,000,000 | 250,000,000 |
Common stock shares issued | 10,996,733 | 11,329,732 |
Common stock shares outstanding | 10,996,733 | 11,329,732 |
Common stock - no par value (in Dollars per share) | $0 | $0 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Net revenues (note 12) | $40,467,833 | $34,402,394 |
Cost of revenues (note 12): | ||
Cost of revenues | 26,821,374 | 24,316,639 |
Network expenses | 1,222,096 | 1,143,644 |
Depreciation of property and equipment | 199,642 | 182,974 |
Amortization of intangible assets (note 7) | 3,924 | |
Total cost of revenues | 28,247,036 | 25,643,257 |
Gross profit | 12,220,797 | 8,759,137 |
Expenses: | ||
Sales and marketing | 3,799,175 | 4,021,774 |
Technical operations and development | 1,114,195 | 1,089,898 |
General and administrative | 1,815,188 | 1,767,800 |
Depreciation of property and equipment | 59,262 | 56,304 |
Amortization of intangible assets (note 7) | 53,215 | 219,030 |
Impairment of indefinite life intangible assets (note 7) | 12,493 | 250,688 |
Loss on currency forward contracts (note 6) | 956,858 | 551,371 |
Total expenses | 7,810,386 | 7,956,865 |
Income from operations | 4,410,411 | 802,272 |
Other income (expense): | ||
Interest expense, net | -24,775 | -73,833 |
Total other income (expense) | -24,775 | -73,833 |
Income before provision for income taxes | 4,385,636 | 728,439 |
Provision for income taxes (note 9) | 1,551,693 | 251,600 |
Net income | 2,833,943 | 476,839 |
Other comprehensive income (loss), net of tax | ||
Gain (loss) on hedging activities | -960,866 | -442,978 |
Net amount reclassified to earnings | 416,074 | 227,511 |
Other comprehensive income (loss) net of tax of $319,878 and $112,240 for the three months ended March 31, 2015 and March 31, 2014 | -544,792 | -215,467 |
Comprehensive income for the period | $2,289,151 | $261,372 |
Basic earnings per common share (note 11) (in Dollars per share) | $0.25 | $0.04 |
Shares used in computing basic earnings per common share (note 11) (in Shares) | 11,142,628 | 11,028,559 |
Diluted earnings per common share (note 11) (in Dollars per share) | $0.24 | $0.04 |
Shares used in computing diluted earnings per common share (note 11) (in Shares) | 11,580,047 | 11,639,617 |
Consolidated_Statements_of_Ope1
Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parentheticals) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Other comprehensive income (loss), tax | $319,878 | $112,240 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating activities: | ||
Net income for the period | $2,833,943 | $476,839 |
Items not involving cash: | ||
Depreciation of property and equipment | 258,904 | 239,278 |
Amortization of intangible assets | 57,139 | 219,030 |
Impairment of indefinite life intangible asset | 12,493 | 250,688 |
Deferred income taxes recovery | -164,250 | -343,231 |
Excess tax benefits from share-based compensation expense | -1,013,800 | |
Amortization of deferred rent | -2,492 | 3,212 |
Disposal of domain names | 6,328 | 1,622 |
Loss (gain) on change in the fair value of forward contracts | 158,793 | 87,146 |
Stock-based compensation | 125,048 | 100,977 |
Change in non-cash operating working capital: | ||
Accounts receivable | -168,585 | -1,262,921 |
Inventory | -113,150 | -199,747 |
Prepaid expenses and deposits | -1,299,778 | -366,836 |
Prepaid domain name registry and ancillary services fees | -1,462,844 | -1,815,683 |
Income taxes recoverable | 661,768 | -433,301 |
Accounts payable | 117,566 | 1,670,415 |
Accrued liabilities | -59,220 | -422,398 |
Customer deposits | -136,443 | -29,129 |
Deferred revenue | 2,061,510 | 2,748,933 |
Accreditation fees payable | 51,027 | 50,087 |
Net cash (used in) / provided by operating activities | 2,937,757 | -38,819 |
Financing activities: | ||
Proceeds received on exercise of stock options | 247,983 | 911,081 |
Excess tax benefits from share-based compensation expense | 412,642 | 1,013,800 |
Repurchase of common stock | -7,712,145 | -82,286 |
Proceeds received on loan payable | 3,500,000 | |
Repayment of loan payable | -616,667 | |
Net cash provided by / (used in) financing activities | -3,551,520 | 1,225,928 |
Additions to property and equipment | -191,762 | -68,745 |
Gross proceeds from the waiver of rights to .online registry | 6,619,832 | |
Net cash provided by (used in) investing activities | 6,020,577 | -68,745 |
Increase in cash and cash equivalents | 5,406,814 | 1,118,364 |
Cash and cash equivalents, beginning of period | 8,271,377 | 12,418,888 |
Cash and cash equivalents, end of period | 13,678,191 | 13,537,252 |
Supplemental cash flow information: | ||
Interest paid | 38,893 | 73,949 |
Income taxes paid, net | 564,139 | 669,624 |
Supplementary disclosure of non-cash investing and financing activities: | ||
Property and equipment acquired during the period not yet paid for | 66,798 | 285,821 |
Ting Virginia, LLC [Member] | ||
Financing activities: | ||
Additional cost of acquisition of Ting Virginia, LLC., net of cash of $21,423 | ($407,493) |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Unaudited) (Parentheticals) (Ting Virginia, LLC [Member], USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Ting Virginia, LLC [Member] | ||
Net Cash | $21,423 | $21,423 |
Note_1_Organization_of_The_Com
Note 1 - Organization of The Company | 3 Months Ended |
Mar. 31, 2015 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. ORGANIZATION OF THE COMPANY: |
Tucows Inc., a Pennsylvania corporation (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions), together with our consolidated subsidiaries, is a global distributor of Internet services, including domain name registration, security and identity products through digital certificates, email and mobile telephony and fixed Internet access services. The Company’s Internet Services are distributed through its global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users | |
We were incorporated under the laws of the Commonwealth of Pennsylvania in November 1992 under the name Infonautics, Inc. In August 2001, we completed our acquisition of Tucows Inc., a Delaware corporation, and we changed our name from Infonautics, Inc. to Tucows Inc. Our principal executive office is located in Toronto, Ontario and we have other offices in the Netherlands, Germany and the United States. Our common stock is listed on NASDAQ under the symbol “TCX” and on the Toronto Stock Exchange under the symbol “TC”. |
Note_2_Basis_of_Presentation
Note 2 - Basis of Presentation | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Disclosure Text Block [Abstract] | |||||
Basis of Accounting [Text Block] | 2. BASIS OF PRESENTATION: | ||||
The accompanying unaudited interim consolidated balance sheets, and the related consolidated statements of operations and comprehensive income and cash flows reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the financial position of Tucows and its subsidiaries as at March 31, 2015 and the results of operations and cash flows for the interim periods ended March 31, 2015 and 2014. The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for future periods. | |||||
The accompanying unaudited interim consolidated financial statements have been prepared by Tucows in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosure normally included in the Company's annual audited consolidated financial statements and accompanying notes have been condensed or omitted. These interim consolidated financial statements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2014 included in Tucows' 2014 Annual Report on Form 10-K filed with the SEC on March 11, 2015. | |||||
There have been no material changes to our significant accounting policies during the three months ended March 31, 2015 as compared to the significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. | |||||
For purposes of clarification, significant accounting policies regarding revenue recognition and derivative financial instruments are included below: | |||||
(a) Revenue recognition | |||||
The Company’s revenues are derived from domain name registration fees on both a wholesale and retail basis, the sale of domain names, the provisioning of other Internet services and advertising and other revenue. Amounts received in advance of meeting the revenue recognition criteria described below are recorded as deferred revenue. | |||||
The Company earns registration fees in connection with each new, renewed and transferred-in registration and from providing provisioning of other Internet services to resellers and registrars on a monthly basis. Service has been provided in connection with registration fees once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards. | |||||
Domain names are generally purchased for terms of one to ten years. Registration fees charged for domain name registration and provisioning services are recognized on a straight-line basis over the life of the contracted term. Other Internet services that are provisioned for annual periods or longer, are recognized on a straight-line basis over the life of the contracted term. Other Internet services that are provisioned on a monthly basis are recognized as services are provided. | |||||
For arrangements with multiple deliverables, the Company allocates revenue to each deliverable if the delivered item(s) has value to the customer on a standalone basis and, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The fair value of the selling price for a deliverable is determined using a hierarchy of (1) Company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price. The Company allocates any arrangement fee to each of the elements based on their relative selling prices. | |||||
Revenue generated from the sale of domain names, earned from transferring the rights to domain names under the Company’s control, are recognized once the rights have been transferred and payment has been received in full. | |||||
The Company derives revenues from the provisioning of mobile phone and fixed Internet access services through its Ting website. These revenues are recognized once services have been provided. Revenues for wireless services are billed based on the actual amount of monthly services utilized by each customer during their billing cycle on a postpaid basis. The Company’s billing cycle for each customer is computed based on the customer’s activation date. As a result, the Company estimates the amount of revenues earned but not billed from the end of each billing cycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories to subscribers is recognized when title and risk of loss is transferred to the subscriber and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue. | |||||
The Company also generates advertising and other revenue through its online libraries of shareware, freeware and online services presented on its website. Advertising revenue includes revenue derived from cost-per action advertising links we display on third party websites who provide syndicated pay-per-click advertising on OpenSRS Domain Expiry Stream domains and the Company’s Portfolio Domains. In addition, the Company uses third party partners to derive pay-per-click advertising on the Tucow.com website. Advertising revenue is recognized on a monthly basis based on the number of cost-per-action services that were provided in the month. | |||||
In those cases where payment is not received at the time of sale, additional conditions for recognition of revenue are that the collection of the related accounts receivable is reasonably assured and the Company has no further performance obligations. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues at the time of the sale based on historical experiences and current expectations. | |||||
The Company establishes provisions for possible uncollectible accounts receivable and other contingent liabilities which may arise in the normal course of business. Historically, credit losses have been within the Company’s expectations and the provisions the Company has established have been appropriate. However, the Company has, on occasion, experienced issues which have led to accounts receivable not being fully collected. Should these issues occur more frequently, additional provisions may be required. | |||||
(b) Property and equipment | |||||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided on a straight-line basis so as to depreciate the cost of depreciable assets over their estimated useful lives at the following rates: | |||||
Asset | Rate | ||||
Computer equipment | 30 | % | |||
Computer software | 100 | % | |||
Furniture and equipment | 20 | % | |||
Vehicles | 20 | % | |||
Fiber network (years) | 15 | ||||
Customer equipment and installations (years) | 3 | ||||
Leasehold improvements | Over term of lease | ||||
The Company reviews the carrying values of its property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated undiscounted future cash flows expected to result from the use of the group of assets and its eventual disposition is less than its carrying amount, it is considered to be impaired. The amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset, with fair value being determined based upon discounted cash flows or appraised values, depending on the nature of the assets. | |||||
Additions to the fiber network are recorded at cost, including all material, labour, vehicle and installation and construction costs and certain indirect costs associated with the construction of cable transmission and distribution facilities. While the Company’s capitalization is based on specific activities, once capitalized, costs are tracked by fixed asset category at the fiber network level and not on a specific asset basis. For assets that are retired, the estimated historical cost and related accumulated depreciation is removed. | |||||
Costs associated with initial customer installation include materials, labour, vehicle and installation and construction costs and certain indirect costs. Indirect costs are associated with the activities of the Company’s personnel who assist in connecting and activating the new service and consist of compensation and other costs associated with these support functions. | |||||
The costs of disconnecting service at a customer’s dwelling or reconnecting service to a previously installed dwelling are charged to operating expense in the period incurred. Costs for repairs and maintenance are charged to operating expense as incurred, while plant and equipment replacement and betterments, including replacement of cable drops from pole to the dwelling, are capitalized. | |||||
(c) Derivative Financial Instruments | |||||
During the three months ended March 31, 2015 and the year ended December 31, 2014 ("Fiscal 2014"), we used derivative financial instruments to manage foreign currency exchange risk. We account for these instruments in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, “Derivatives and Hedging” ("Topic 815"), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. Topic 815 also requires that changes in our derivative financial instruments’ fair values be recognized in earnings, unless specific hedge accounting and documentation criteria are met (i.e. the instruments are accounted for as hedges). We recorded the effective portions of the gain or loss on derivative financial instruments that were designated as cash flow hedges in accumulated other comprehensive income in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of a designated cash flow hedge, if applicable, is recognized in net income. | |||||
For certain contracts, the Company has not complied with the documentation standards required for its forward foreign exchange contracts to be accounted for as hedges and has, therefore, accounted for such forward foreign exchange contracts at their fair values with the changes in fair value recorded in net income. | |||||
The fair value of the forward exchange contracts are determined using an estimated credit adjusted mark-to-market valuation which takes into consideration the Company's and the counterparty's credit risk. The valuation technique used to measure the fair values of the derivative instruments is a discounted cash flow technique, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for the derivative instruments. Our discounted cash flow techniques use observable market inputs, such as foreign currency spot and forward rates. |
Note_3_New_Accounting_Policies
Note 3 - New Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | 3. NEW ACCOUNTING POLICIES: |
Recent Accounting Pronouncements Adopted | |
In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers, which steps are to (1) identify the contract(s) with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. ASU 2014-09 will be effective, reflecting the one-year proposed deferral, for interim and annual periods beginning after December 15, 2017 (January 1, 2018 for the Company). Early adoption of the standard is permitted but not before the original effective date. Companies can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of evaluating the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements and the selected method of transition to the new standard. | |
In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance in determining whether fees for purchasing cloud computing services (or hosted software solutions) are considered internal-use software or should be considered a service contract. The cloud computing agreement that includes a software license should be accounted for in the same manner as internal-use software if customer has contractual right to take possession of the software during the hosting period without significant penalty and it is feasible to either run the software on customer’s hardware or contract with another vendor to host the software. Arrangements that don’t meet the requirements for internal-use software should be accounted for as a service contract. ASU 2015-05 will be effective for interim and annual periods beginning after December 15, 2015 (January 1, 2016 for the Company). Early adoption of the standard is permitted. The Company is currently in the process of evaluating the impact that the adoption of ASU 2015-05 will have on its consolidated financial statements. |
Note_4_Acquisitions_and_Divest
Note 4 - Acquisitions and Divestitures | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Business Combinations [Abstract] | |||||
Business Combination Disclosure [Text Block] | 4. Acquisitions and Divestitures: | ||||
Acquisitions | |||||
On February 27, 2015, Ting Fiber, Inc., one of our wholly owned subsidiaries, acquired a 70% ownership interest in the newly formed Ting Virginia, LLC and its acquired subsidiaries, Blue Ridge Websoft, LLC (doing business as Blue Ridge InternetWorks), Fiber Roads, LLC and Navigator Network Services, LLC (the “BRI Group”) for a consideration of approximately $3.6 million, subject to additional customary adjustments as anticipated in the purchase agreement, primarily related to estimated working capital levels at closing. The purchase price was satisfied through our releasing $3.1 million from the escrow accounts established during Fiscal 2014 and an additional payment of $0.4 million made at closing. Ting Virginia, LLC is an independent Internet service provider in Charlottesville, Virginia, doing business primarily as Blue Ridge InternetWorks. The BRI Group provides high speed internet access, Internet hosting and network consulting services to over 3,000 customers in central Virginia. The purchase price was primarily satisfied through an advance under our 2012 DLR Loan facility. | |||||
Ting Fiber Inc. and the selling shareholders (the “Minority Shareholders”) also agreed to certain put and call options with regard to the remaining 30% interest in Ting Virginia, LLC retained by the Minority Shareholders. On the second anniversary of the closing date, Ting Fiber, Inc. may exercise a call option to purchase an additional 20% ownership interest in Ting Virginia, LLC. Contingent upon the exercise of the call option by Ting Fiber, Inc. the Minority Shareholders may exercise a put option within 7 days following the exercise of the call option by Ting Fiber, Inc., to sell their remaining 10% ownership interest in Ting Virginia LLC. The consideration to be exchanged for the shares acquired or sold under the options shall be $100,000 per percentage point of the equity interest acquired. | |||||
In addition, on the fourth anniversary of the closing date, the Minority Shareholders may exercise a put option under which the Ting Fiber Inc. shall be irrevocably obligated to purchase the Minority Shareholders’ remaining interest for $120,000 per percentage point of the equity interest acquired for a total of $3,600,000. | |||||
The Company has determined that the put options described above are embedded within the non-controlling interest shares that are subject to the put options. The redemption feature requires classification of the Minority Shareholders’ Interest in the Consolidated Balance Sheets outside of equity under the caption “Redeemable non-controlling interest”. The present value of the liability at the acquisition date is $3,000,000. | |||||
The preliminary purchase consideration is comprised as follows: | |||||
Cash | $ | 3,135,140 | |||
Assumption of debt | 418,775 | ||||
Redeemable non-controlling interest | 3,000,000 | ||||
$ | 6,553,915 | ||||
The following table represents the purchase price allocation based on the estimated fair values of the assets | |||||
Current assets (including cash of $21,423) | $ | 338,577 | |||
Current liabilities | (529,702 | ) | |||
Property and equipment, including: | |||||
Fiber network | 3,456,024 | ||||
Computer equipment | 200,000 | ||||
Furniture and equipment | 5,000 | ||||
Vehicles | 92,000 | ||||
Leasehold improvements | 50,000 | ||||
Intangible assets, including: | |||||
Network rights | 692,000 | ||||
Customer relationships | 68,000 | ||||
Goodwill | 2,182,016 | ||||
Net assets acquired | $ | 6,553,915 | |||
The goodwill recorded on the acquisition is expected to be deductible for tax purposes. | |||||
The fair value of current assets acquired includes accounts receivable with a fair value of $0.2 million. All accounts receivable acquired at acquisition are expected to be collectable. | |||||
The acquisition had no significant impact on revenues and net earnings for the three months ended March 31, 2015. There was also no significant impact on the Company’s revenues and net income on a pro forma basis for all periods presented. | |||||
The Company acquired new classes of assets in this acquisition, namely fiber network and vehicles. The Company has accordingly, in connection with its depreciation policies, added additional disclosure in note 2 (b) above. |
Note_5_Other_Assets
Note 5 - Other Assets | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure Text Block Supplement [Abstract] | |||||||||
Other Assets Disclosure [Text Block] | 5. Other assets: | ||||||||
Other assets are comprised of the following: | |||||||||
Year ended | Year ended | ||||||||
March 31, 2015 | 31-Dec-14 | ||||||||
Amounts in escrow advanced to acquire a controlling ownership interest in Ting Virginia, LLC (see note 4) | $ | — | $ | 3,125,000 | |||||
Amounts advanced to the joint venture with Radix FZC and NameCheap Inc. which was terminated in February 2015 (note 10) | — | 5,074,000 | |||||||
$ | — | $ | 8,199,000 | ||||||
Note_6_Derivative_Instruments_
Note 6 - Derivative Instruments and Hedging Activities | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 6. Derivative instruments and hedging activities: | ||||||||||||||
Foreign currency forward contracts | |||||||||||||||
In October 2012, the Company entered into a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. As part of its risk management strategy, the Company uses derivative instruments to hedge a portion of the foreign exchange risk associated with these costs. The Company does not use these forward contracts for trading or speculative purposes. These forward contracts typically mature between one and eighteen months. | |||||||||||||||
The Company has designated these transactions as cash flow hedges of forecasted transactions under ASC Topic 815. As the critical terms of the hedging instrument, and of the entire hedged forecasted transaction, are the same, in accordance with ASC Topic 815, the Company has been able to conclude that changes in fair value or cash flows attributable to the risk of being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, unrealized gains or losses on the effective portion of these contracts have been included within other comprehensive income. The fair value of the contracts, as of March 31, 2015, is recorded as derivative instrument liabilities. | |||||||||||||||
As of March 31, 2015, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $19.5 million, of which $16.5 million met the requirements of ASC Topic 815 and were designated as hedges (March 31, 2014 - $20.1 million of which $15.6 million were designated as hedges). | |||||||||||||||
Fair value of derivative instruments and effect of derivative instruments on financial performance | |||||||||||||||
The effect of these derivative instruments on our consolidated financial statements as of, and for the three months ended March 31, 2015, were as follows (amounts presented do not include any income tax effects). | |||||||||||||||
Fair value of derivative instruments in the consolidated balance sheets | |||||||||||||||
As of | As of | ||||||||||||||
March 31, | December 31, | ||||||||||||||
2015 | 2014 | ||||||||||||||
Derivatives | Balance Sheet | Fair Value | Fair Value | ||||||||||||
Location | Asset | Asset | |||||||||||||
(Liability) | (Liability) | ||||||||||||||
Foreign currency forward contracts not designated as cash flow hedges | Derivative instruments | $ | (327,922 | ) | $ | (169,129 | ) | ||||||||
Foreign currency forward contracts designated as cash flow hedges | Derivative instruments | $ | (1,811,346 | ) | $ | (946,676 | ) | ||||||||
Total foreign currency forward contracts | Derivative instruments | $ | (2,139,268 | ) | $ | (1,115,805 | ) | ||||||||
Movement in Accumulated Other Comprehensive Income ("AOCI") balance for the three months ended March 31, 2015: | |||||||||||||||
Gains and losses on cash flow hedges | Tax impact | Total AOCI | |||||||||||||
Opening AOCI balance – December 31, 2014 | $ | (946,676 | ) | $ | 324,235 | $ | (622,441 | ) | |||||||
Other comprehensive income (loss)before reclassifications | (1,510,346 | ) | 549,480 | (960,866 | ) | ||||||||||
Amount reclassified from accumulated other comprehensive income | 645,676 | (229,602 | ) | 416,074 | |||||||||||
Other comprehensive income (loss) for the three months ended March 31, 2015 | (864,670 | ) | 319,878 | (544,792 | ) | ||||||||||
Ending AOCI balance – March 31, 2015 | $ | (1,811,346 | ) | $ | 644,113 | $ | (1,167,233 | ) | |||||||
Effects of derivative instruments on income and other comprehensive income (OCI) for the three months ended March 31, 2015 and March 31, 2014 are as follows: | |||||||||||||||
Derivatives in Cash Flow | Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) | ||||||||||
Hedging Relationship | |||||||||||||||
Operating expenses | $ | (301,590 | ) | ||||||||||||
Foreign currency forward contracts for the three months ended March 31, 2015 | $ | (544,792 | ) | Cost of revenues | (114,484 | ) | Operating expenses | $ | (15,419 | ) | |||||
Operating expenses | $ | (168,620 | ) | ||||||||||||
Foreign currency forward contracts for the three months ended March 31, 2014 | $ | (215,467 | ) | Cost of revenues | (58,891 | ) | Operating expenses | $ | — | ||||||
In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company has recorded a loss of $0.1 million upon settlement and a loss of $0.2 million for the change in fair value of outstanding contracts for the three months ended March 31, 2015, in the consolidated statement of operations and comprehensive income. The Company has recorded a loss of $0.1 million upon settlement and a loss of $0.1 million for the change in fair value of outstanding contracts for the three months ended March 31, 2014, in the consolidated statement of operations and comprehensive income. |
Note_7_Goodwill_and_Other_Inta
Note 7 - Goodwill and Other Intangible Assets | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | 7. Goodwill and Other Intangible Assets: | ||||||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||||||
Goodwill represents the excess of purchase price over the fair value of tangible or identifiable intangible assets acquired and liabilities assumed in our acquisitions. | |||||||||||||||||||||||||||||
Goodwill consists of the following: | |||||||||||||||||||||||||||||
Boardtown Corporation | Hosted | Innerwise Inc. | Mailbank.com Inc. | EPAG Domainservices GmbH | BRI Group | Total | |||||||||||||||||||||||
Messaging | |||||||||||||||||||||||||||||
Assets of | |||||||||||||||||||||||||||||
Critical Path | |||||||||||||||||||||||||||||
Balances, December 31, 2014 | $ | 2,044,847 | $ | 4,072,297 | $ | 5,801,040 | $ | 6,072,623 | $ | 882,320 | $ | - | $ | 18,873,127 | |||||||||||||||
Acquisition of BRI Group, February 2015 | - | - | - | - | - | 2,182,016 | 2,182,016 | ||||||||||||||||||||||
Balances, March 31, 2015 | $ | 2,044,847 | $ | 4,072,297 | $ | 5,801,040 | $ | 6,072,623 | $ | 882,320 | $ | 2,182,016 | $ | 21,055,143 | |||||||||||||||
The Company’s goodwill relates predominantly to its Domain Services operating segment. | |||||||||||||||||||||||||||||
On February 27, 2015, Ting Fiber, Inc., one of our wholly owned subsidiaries, acquired a 70% ownership interest in the BRI Group. Goodwill is not amortized, but is subject to an annual impairment test. | |||||||||||||||||||||||||||||
Other Intangible Assets: | |||||||||||||||||||||||||||||
Intangible assets consist of network rights, brand, customer relationships, surname domain names, non-competition agreements and our portfolio of domain names. As reflected in the table below, these balances are being amortized on a straight-line basis over the life of the intangible assets, except for the surname domain names and portfolio domain names, which have been determined to have an indefinite life and which are tested annually for impairment. | |||||||||||||||||||||||||||||
A summary of acquired intangible assets for the three months ended March 31, 2015 is as follows: | |||||||||||||||||||||||||||||
Brand | Customer relationships | Network rights | Surname domain names | Direct navigation domain names | |||||||||||||||||||||||||
7 years | 4 - 7 years | 15 years | indefinite life | indefinite life | Total | ||||||||||||||||||||||||
Net book value, December 31, 2014 | $ | 110,510 | $ | 625,220 | $ | - | $ | 11,525,624 | $ | 1,941,231 | $ | 14,202,585 | |||||||||||||||||
Acquisition of BRI Group, February 2015 | - | 68,000 | 692,000 | - | - | 760,000 | |||||||||||||||||||||||
Sales of domain names | - | - | - | (1,623 | ) | (4,705 | ) | (6,328 | ) | ||||||||||||||||||||
Impairment of domain names | - | - | - | (7,788 | ) | (4,705 | ) | (12,493 | ) | ||||||||||||||||||||
Amortization expense | (7,710 | ) | (45,505 | ) | (3,924 | ) | - | - | (57,139 | ) | |||||||||||||||||||
Net book value, March 31, 2015 | $ | 102,800 | $ | 647,715 | $ | 688,076 | $ | 11,516,213 | $ | 1,931,821 | $ | 14,886,625 | |||||||||||||||||
As of March 31, 2015, the accumulated amortization for the definite life intangibles was $5.7 million. | |||||||||||||||||||||||||||||
With regard to indefinite life intangible assets, as part of our normal renewal process we assessed that certain domain names that were acquired in the June 2006 acquisition of Mailbank.com Inc. that were up for renewal should not be renewed. Accordingly, for the three months ended March 31, 2015, domain names, with a book value of $12,493 (three months ended March 31, 2014 - $0.3 million), were not renewed and were recorded as an impairment of indefinite life intangible assets. |
Note_8_Loan_Payable
Note 8 - Loan Payable | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | 8. LOAN PAYABLE: |
The Company has credit agreements (collectively the “Amended Credit Facility”) with the Bank of Montreal (the “Bank” or “BMO”) that were amended on November 19, 2012, and which provide it with access to two revolving demand loan facilities (the “2012 Demand Loan Facilities”), a treasury risk management facility and an operating demand loan. | |
Two Revolving Demand Loan Facilities. | |
The 2012 Demand Loan Facilities are governed by the terms of the Offer Letter, dated as of November 19, 2012, by and between the Company and the Bank and filed with the SEC on November 21, 2012. | |
Under the terms of the Amended Credit Facility, our prior demand loan facilities have been amended to provide an aggregate of $14 million in funds available through the 2012 Demand Loan Facilities, which consist of a demand loan revolving facility (the “2012 DLR Loan”) and a demand loan revolving reducing facility (the “2012 DLRR Loan”). The 2012 DLR Loan accrues interest at the Bank’s U.S. Base Rate plus 1.25%. The Company may elect to pay interest on the 2012 DLRR Loan either at the Bank’s U.S. Base Rate plus 1.25% or LIBOR plus 2.50%. Aggregate advances under the 2012 Demand Loan Facilities may not exceed $14 million and no more than $2 million of such advances may be used to finance repurchases of Company common stock. The 2012 Demand Loan Facilities are subject to an undrawn aggregate standby fee of 0.20% following the first draw, which such fee is payable quarterly in arrears. | |
Repayment of advances under the 2012 DLR Loan consist of interest only payments made monthly in arrears and prepayment is permitted without penalty. The outstanding balance under the 2012 DLR Loan as of December 31st of each year is to be fully repaid within 30 days of December 31st through an equivalent advance made under the 2012 DLRR Loan. Advances under the 2012 DLRR Loan will be made annually and solely for such purpose. Each advance under the 2012 DLRR Loan is to be repaid in equal monthly principal payments plus interest, over a period of four years from the date of such advance. | |
On January 7, 2015, the Company successfully concluded a modified “Dutch auction tender offer”, which was funded from available cash. Under the terms of the offer, the Company repurchased an aggregate of 193,907 shares of its common stock at a purchase price of $18.50 per share, for a total of $3,587,280, excluding transaction costs of approximately $70,000. At March 31, 2015, the outstanding balance under the 2012 DLR Loan was $3.5 million (December 31, 2014 - Nil). | |
During the three months ended March 31, 2015 no amounts were drawn down on the 2012 DLRR Loan. At March 31, 2015, the 2012 DLRR Loan was fully repaid. This financing arrangement remain available to fund future operations of the Company, with no set expiry date. | |
Treasury Risk Management Facility | |
The Amended Credit Facility also provides for a $3.5 million settlement risk line to assist the Company with hedging Canadian dollar exposure through foreign exchange forward contracts and/or currency options. Under the terms of the Amended Credit Facility, the Company may enter into such agreements at market rates with terms not to exceed 18 months. As of March 31, 2015, the Company held contracts in the amount of $19.5 million to trade U.S. dollars in exchange for Canadian dollars. | |
Operating Demand Loan | |
The Amended Credit Facility also provides the Company with a $1.0 million operating demand loan facility to assist in meeting its operational needs (the “Operating Demand Loan”). The Operating Demand Loan accrues interest at the Bank’s U.S. Base Rate plus 1.25%. Interest is payable monthly in arrears with any borrowing under the Operating Demand Loan fluctuating widely with periodic clean-up, at a minimum on an annual basis. The Company has also agreed to pay to the Bank a monthly monitoring fee of US$500 with respect to this loan. The Operating Demand Loan is payable on demand at any time, at the sole discretion of the Bank, with or without cause, and the Bank may terminate the Operating Demand Loan at any time. As of March 31, 2015, the Company had no amounts outstanding under its Operating Demand Loan. | |
General Terms | |
The Company’s Amended Credit Facility contains customary representations and warranties, affirmative and negative covenants, and events of default. The Company’s obligations under the Amended Credit Facility are guaranteed and secured by a security interest in substantially all of its assets. The Amended Credit Facility also requires that the Company comply with certain customary non-financial covenants and restrictions. In addition, the Company has agreed to comply with the following financial covenants at all times, which are to be calculated on a rolling four quarter basis: (i) Maximum Total Funded Debt to EBITDA of 2.00:1; and (ii) Minimum Fixed Charge Coverage of 1.20:1. Further, its Maximum Annual Capital Expenditures cannot exceed $3.6 million per year, which limit will be reviewed on an annual basis. As at and for the period ended, March 31, 2015, the Company was in compliance with these covenants. As at and for the period ended, March 31, 2014, the Company was in compliance with these covenants. |
Note_9_Income_Taxes
Note 9 - Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 9. INCOME TAXES |
For the three months ended March 31, 2015, the Company recorded a provision for income taxes of $1.6 million on income before income taxes of $4.4 million, using an estimated effective tax rate for the fiscal year ending December 31, 2015 adjusted for certain minimum state taxes. Comparatively, for the three months ended March 31, 2014, the Company recorded a provision for income taxes of $0.3 million on income before taxes of $0.7 million, using an estimated effective tax rate for its fiscal year ending December 31, 2014. | |
In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the years in which those temporary differences become deductible. The Company considers projected future taxable income, uncertainties related to the industry in which we operate, and tax planning strategies in making this assessment. | |
The Company follows the provisions of FASB ASC Topic 740, Income Taxes to account for income tax exposures. The application of this interpretation requires a two-step process that separates recognition of uncertain tax benefits from measurement thereof. | |
The Company had approximately $0.1 million of total gross unrecognized tax benefit as of March 31, 2015 and as of December 31, 2014, which if recognized would favorably affect its income tax rate in future periods. The unrecognized tax benefit relates primarily to prior year Pennsylvania state franchise taxes. 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 March 31, 2015 and December 31, 2014, respectively. |
Note_10_Other_Liabilities
Note 10 - Other Liabilities | 3 Months Ended |
Mar. 31, 2015 | |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Other Liabilities Disclosure [Text Block] | 10. OTHER LIABILITIES: |
In February 2015, the Company waived its rights under the formerly proposed joint venture to operate the .online registry and instead entered into a Joint Marketing agreement with its venture partners under which its original capital contributions have been returned and a set of go-forward marketing arrangements have been created instead. These marketing arrangements have resulted in the Company receiving a gain of $1.5 million, which will be recognized evenly over the three-year term of the marketing agreement once .online is generally available. |
Note_11_Basic_and_Diluted_Earn
Note 11 - Basic and Diluted Earnings per Common Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Earnings Per Share [Text Block] | 11. BASIC AND DILUTED EARNINGS PER COMMON SHARE: | ||||||||
Basic earnings per common share has been calculated by dividing net income for the period by the weighted average number of common shares outstanding during each period. Diluted earnings per share has been calculated by dividing net income for the period by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. In computing diluted earnings per share, the treasury stock method is used to determine the number of shares assumed to be purchased from the conversion of common shares equivalents or the proceeds of option exercises. | |||||||||
The following table is a summary of the basic and diluted earnings per common share: | |||||||||
Three months | Three months | ||||||||
ended | ended | ||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Numerator for basic and diluted earnings per common share: | |||||||||
Net income for the period | $ | 2,833,943 | $ | 476,839 | |||||
Denominator for basic and diluted earnings per common share: | |||||||||
Basic weighted average number of common shares outstanding | 11,142,628 | 11,028,559 | |||||||
Effect of outstanding stock options | 437,419 | 611,058 | |||||||
Diluted weighted average number of shares outstanding | 11,580,047 | 11,639,617 | |||||||
Basic earnings per common share | $ | 0.25 | $ | 0.04 | |||||
Diluted earnings per common share | $ | 0.24 | $ | 0.04 | |||||
For the three months ended March 31, 2015, outstanding options to purchase 116,600 common shares were not included in the computation of diluted income per common share because all such options had exercise prices greater than the average market price of the common shares. | |||||||||
During the three months ended March 31, 2015, 193,907 common shares were repurchased and cancelled under the terms of a modified Dutch auction tender offer announced in December 2014. | |||||||||
During the three months ended March 31, 2015, 214,089 common shares were repurchased and cancelled under the terms of our stock repurchase program announced in February 2015. | |||||||||
During the three months ended March 31, 2014, 6,092 common shares were repurchased and cancelled under the terms of our stock repurchase program announced in March 2014. | |||||||||
The computation of earnings per share and diluted earnings per share for the three months ended March 31, 2015 and 2014 include reductions in the number of shares outstanding due to these repurchases. |
Note_12_Segment_Reporting
Note 12 - Segment Reporting | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Reporting Disclosure [Text Block] | 12. SEGMENT REPORTING: | ||||||||||||||||
(a) We are organized and managed based on two segments, which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate. The two segments are Domain Services and Network Access Services and are described as follows: | |||||||||||||||||
1 | Domain Services – This segment includes wholesale and retail domain name registration services, value added services and portfolio services. The Company primarily earns revenues from the registration fees charged to resellers in connection with new, renewed and transferred domain name registrations; the sale of retail Internet domain name registration and email services to individuals and small businesses; and by making its portfolio of domain names available for sale or lease. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada. | ||||||||||||||||
2 | Network Access Services - This segment derives revenue from the sale of retail mobile phones and services to individuals and small businesses through the Ting website, as well as provides high speed Internet access, Internet hosting and network consulting to customers in Central Virginia through its acquisition of a 70% share in Ting Virginia, LLC. Revenues are generated in the United States. | ||||||||||||||||
The Chief Executive Officer is the chief operating decision maker and regularly reviews the operations and performance by segment. The chief operating decision maker reviews gross margin as a key measure of performance for each segment and to make decisions about the allocation of resources. Sales and marketing expenses, technical operations and development expenses, general and administrative expenses, depreciation of property and equipment, loss on disposition of property and equipment, amortization of intangibles, loss (gain) on currency forward contracts, other income (expense), and provision for income taxes, are organized along functional lines and are not included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and are not reviewed at the segment level by the chief operating decision maker. | |||||||||||||||||
Information by reportable segments, which is regularly reported to the chief operating decision maker is as follows: | |||||||||||||||||
Three months ended March 31, 2015 | Domain Name | Network | Consolidated | ||||||||||||||
Services | Access | Totals | |||||||||||||||
Services | |||||||||||||||||
Net Revenues | $ | 27,540,819 | $ | 12,927,014 | $ | 40,467,833 | |||||||||||
Cost of Revenues | 19,476,217 | 7,345,157 | 26,821,374 | ||||||||||||||
Gross Profit before network expenses | 8,064,602 | 5,581,857 | 13,646,459 | ||||||||||||||
Network expenses | 1,425,662 | ||||||||||||||||
Gross Profit | 12,220,797 | ||||||||||||||||
Expenses: | |||||||||||||||||
Sales and marketing | 3,799,175 | ||||||||||||||||
Technical operations and development | 1,114,195 | ||||||||||||||||
General and administrative | 1,815,188 | ||||||||||||||||
Depreciation of property and equipment | 59,262 | ||||||||||||||||
Amortization of intangibles | 53,215 | ||||||||||||||||
Impairment of indefinite life intangible assets | 12,493 | ||||||||||||||||
Loss on currency forward contracts | 956,858 | ||||||||||||||||
Income from operations | 4,410,411 | ||||||||||||||||
Other expenses, net | 24,775 | ||||||||||||||||
Income before provision for income taxes | $ | 4,385,636 | |||||||||||||||
Three months ended March 31, 2014 | Domain Name | Network | Consolidated | ||||||||||||||
Services | Access | Totals | |||||||||||||||
Services | |||||||||||||||||
Net Revenues | $ | 27,690,262 | $ | 6,712,132 | $ | 34,402,394 | |||||||||||
Cost of Revenues | 20,035,208 | 4,281,431 | 24,316,639 | ||||||||||||||
Gross Profit before network expenses | 7,655,054 | 2,430,701 | 10,085,755 | ||||||||||||||
Network expenses | 1,326,618 | ||||||||||||||||
Gross Profit | 8,759,137 | ||||||||||||||||
Expenses: | |||||||||||||||||
Sales and marketing | 4,021,774 | ||||||||||||||||
Technical operations and development | 1,089,898 | ||||||||||||||||
General and administrative | 1,767,800 | ||||||||||||||||
Depreciation of property and equipment | 56,304 | ||||||||||||||||
Amortization of intangibles | 219,030 | ||||||||||||||||
Impairment of indefinite life intangible assets | 250,688 | ||||||||||||||||
Loss on currency forward contracts | 551,371 | ||||||||||||||||
Income from operations | 802,272 | ||||||||||||||||
Other expenses, net | 73,833 | ||||||||||||||||
Income before provision for income taxes | $ | 728,439 | |||||||||||||||
(b) The following is a summary of the Company’s revenue earned from each significant revenue stream: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Domain Services: | |||||||||||||||||
Wholesale | |||||||||||||||||
Domain Services | $ | 21,175,131 | $ | 21,648,954 | |||||||||||||
Value Added Services | 2,241,998 | 2,603,605 | |||||||||||||||
Total Wholesale | 23,417,129 | 24,252,559 | |||||||||||||||
Retail | 2,875,728 | 2,384,063 | |||||||||||||||
Portfolio | 1,247,962 | 1,053,640 | |||||||||||||||
Total Domain Services | 27,540,819 | 27,690,262 | |||||||||||||||
Network Access Services: | |||||||||||||||||
Ting | 12,927,014 | 6,712,132 | |||||||||||||||
Total Network Access Services | 12,927,014 | 6,712,132 | |||||||||||||||
$ | 40,467,833 | $ | 34,402,394 | ||||||||||||||
During the three months ended March 31, 2015 and 2014, no customer accounted for more than 10% of total revenue. As at March 31, 2015 and 2014, no customer accounted for more than 10% of accounts receivable. | |||||||||||||||||
(c) The following is a summary of the Company’s cost of revenues from each significant revenue stream: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Domain Services: | |||||||||||||||||
Wholesale | |||||||||||||||||
Domain Services | $ | 17,548,027 | $ | 18,235,215 | |||||||||||||
Value Added Services | 536,132 | 540,722 | |||||||||||||||
Total Wholesale | 18,084,159 | 18,775,937 | |||||||||||||||
Retail | 1,220,500 | 1,015,416 | |||||||||||||||
Portfolio | 171,558 | 243,855 | |||||||||||||||
Total Domain Services | 19,476,217 | 20,035,208 | |||||||||||||||
Network Access Services: | |||||||||||||||||
Ting | 7,345,157 | 4,281,431 | |||||||||||||||
Total Network Access Services | 7,345,157 | 4,281,431 | |||||||||||||||
Network Expenses: | |||||||||||||||||
Network, other costs | 1,222,096 | 1,143,644 | |||||||||||||||
Network, depreciation and amortization costs | 203,566 | 182,974 | |||||||||||||||
Total Network Expenses | 1,425,662 | 1,326,618 | |||||||||||||||
$ | 28,247,036 | $ | 25,643,257 | ||||||||||||||
(d) The following is a summary of the Company’s property and equipment by geographic region: | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Canada | $ | 1,122,910 | $ | 1,131,883 | |||||||||||||
United States | 4,145,540 | 379,891 | |||||||||||||||
Germany | 77,620 | 98,013 | |||||||||||||||
$ | 5,346,070 | $ | 1,609,787 | ||||||||||||||
(e) The following is a summary of the Company’s amortizable intangible assets by geographic region: | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
United States | $ | 754,191 | $ | — | |||||||||||||
Germany | 684,400 | 735,730 | |||||||||||||||
$ | 1,438,591 | $ | 735,730 | ||||||||||||||
(f) The following is a summary of the Company’s deferred tax asset, net of valuation allowance, by geographic region: | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Canada | $ | 8,107,573 | $ | 7,378,619 | |||||||||||||
$ | 8,107,573 | $ | 7,378,619 | ||||||||||||||
(g) Valuation and qualifying accounts: | |||||||||||||||||
Balance at | Charged to | Write-offs | Balance at | ||||||||||||||
beginning | (recovered) | during | end of | ||||||||||||||
period | costs and | period | period | ||||||||||||||
expenses | |||||||||||||||||
Allowance for doubtful accounts, excluding provision for credit notes | |||||||||||||||||
Three months ended March 31, 2015 | $ | 125,766 | $ | 3,996 | $ | — | $ | 121,770 | |||||||||
Year ended December 31, 2014 | $ | 91,226 | $ | (34,540 | ) | $ | — | $ | 125,766 | ||||||||
Note_13_Commitments_and_Contin
Note 13 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 13. COMMITMENTS AND CONTINGENCIES: |
The Company is involved in various legal claims and lawsuits in connection with its ordinary business operations. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions or claims outstanding or pending as of March 31, 2015 cannot be predicted with certainty, management does not believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company's financial position. |
Note_14_Stockholders_Equity
Note 14 - Stockholders' Equity | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||
Stockholders' Equity Note Disclosure [Text Block] | 14. STOCKHOLDERS' EQUITY: | ||||||||||||||||||||||||
The following unaudited table summarizes stockholders' equity transactions for the three month period ended March 31, 2015: | |||||||||||||||||||||||||
Accumulated | |||||||||||||||||||||||||
Additional | other | Total | |||||||||||||||||||||||
Common stock | paid in | comprehensive | stockholders | ||||||||||||||||||||||
Number | Amount | capital | Deficit | income | equity | ||||||||||||||||||||
Balance, December 31, 2014 | 11,329,732 | $ | 14,130,059 | $ | 29,090,058 | $ | (6,955,283 | ) | $ | (622,441 | ) | $ | 35,642,393 | ||||||||||||
Exercise of stock options | 74,997 | 360,949 | (112,966 | ) | - | - | 247,983 | ||||||||||||||||||
Repurchase and retirement of shares | (407,996 | ) | (516,003 | ) | (7,196,142 | ) | - | - | (7,712,145 | ) | |||||||||||||||
Stock-based compensation | - | - | 125,048 | - | - | 125,048 | |||||||||||||||||||
Income tax effect related to stock options exercised | - | - | 412,642 | - | - | 412,642 | |||||||||||||||||||
Net income for the period | - | - | - | 2,833,943 | - | 2,833,943 | |||||||||||||||||||
Unrealized loss on foreign currency forward contracts treated as hedges | - | - | - | - | (960,866 | ) | (960,866 | ) | |||||||||||||||||
Reclassification to net income due to settlement of foreign currency forward contracts treated as hedges | - | - | - | - | 416,074 | 416,074 | |||||||||||||||||||
Balance, March 31, 2015 | 10,996,733 | $ | 13,975,005 | $ | 22,318,640 | $ | (4,121,340 | ) | $ | (1,167,233 | ) | $ | 31,005,072 | ||||||||||||
On January 8, 2015, the Company announced that it successfully concluded a modified “Dutch auction tender offer” that was previously announced on December 8, 2014. Under the terms of the offer, the Company repurchased an aggregate of 193,907 shares of its common stock at a purchase price of $18.50 per share, for a total of $3,587,280, excluding transaction costs of approximately $70,000. The purchase price and all transaction costs were funded from available cash. All shares purchased in the tender offer received the same price and all shares repurchased were immediately retired. As a result of the completion of the tender offer, as of January 7, 2015, the Company had 11,135,825 shares issued and outstanding. | |||||||||||||||||||||||||
On February 11, 2015, the Company announced that its Board of Directors has approved a stock buyback program to repurchase up to $20 million of its common stock in the open market. Purchases will be made exclusively through the facilities of the NASDAQ Capital Market. The stock buyback program commenced on February 16, 2015 and will terminate on or before February 15, 2016. The Company repurchased 214,089 shares under this program during the three months ended March 31, 2015 for a total of $4,055,056. | |||||||||||||||||||||||||
On March 5, 2014, the Company announced a stock buyback program. Under this buyback program, the Company may repurchase up to $20 million of the Company's common stock over the 12-month period that commenced on March 4, 2014. The Company repurchased 6,092 shares under this program during the three months ended March 31, 2014 for a total of $82,286. |
Note_15_Sharebased_Payments
Note 15 - Share-based Payments | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 15. SHARE-BASED PAYMENTS | ||||||||||||||||||||||||||||||||||||||||
(a) Stock options | |||||||||||||||||||||||||||||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model, consistent with the guidance on stock compensation. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The assumptions presented in the table below represent the weighted average of the applicable assumption used to value stock options at their grant date. The Company calculates expected volatility based on historical volatility of the Company's common shares. The expected term, which represents the period of time that options granted are expected to be outstanding, is estimated based on historical exercise experience. The Company evaluated historical exercise behavior when determining the expected term assumptions. The risk-free rate assumed in valuing the options is based on the U.S. Treasury yield curve in effect at the time of grant for the expected term of the option. The Company determines the expected dividend yield percentage by dividing the expected annual dividend by the market price of our common shares at the date of grant. | |||||||||||||||||||||||||||||||||||||||||
Details of stock option transactions for the three months ended March 31, 2015 and March 31, 2014 are as follows: | |||||||||||||||||||||||||||||||||||||||||
Three months ended | Three months ended | ||||||||||||||||||||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||||||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | ||||||||||||||||||||||||||||||||||||||
Shares | Average | Shares | Average | ||||||||||||||||||||||||||||||||||||||
exercise price | exercise price | ||||||||||||||||||||||||||||||||||||||||
per share | per share | ||||||||||||||||||||||||||||||||||||||||
Outstanding, beginning of period | 976,062 | $ | 5.41 | 1,407,639 | $ | 3.8 | |||||||||||||||||||||||||||||||||||
Granted | 45,000 | 19.41 | — | — | |||||||||||||||||||||||||||||||||||||
Exercised | (74,997 | ) | 3.31 | (291,913 | ) | 3.12 | |||||||||||||||||||||||||||||||||||
Forfeited | (2,742 | ) | 12.15 | (5,594 | ) | 5.56 | |||||||||||||||||||||||||||||||||||
Expired | — | — | (2,875 | ) | 3.4 | ||||||||||||||||||||||||||||||||||||
Outstanding, end of period | 943,323 | $ | 6.23 | 1,107,257 | $ | 3.97 | |||||||||||||||||||||||||||||||||||
Options exercisable, end of period | 653,145 | $ | 4.11 | 753,506 | $ | 3.15 | |||||||||||||||||||||||||||||||||||
As of March 31, 2015, the exercise prices, weighted average remaining contractual life and intrinsic values of outstanding options were as follows: | |||||||||||||||||||||||||||||||||||||||||
Options outstanding | Options exercisable | ||||||||||||||||||||||||||||||||||||||||
Exercise | Outstanding | Weighted | Weighted | Aggregate | Number | Weighted | Aggregate | ||||||||||||||||||||||||||||||||||
price | Number | average | Average | intrinsic | exercisable | average | intrinsic | ||||||||||||||||||||||||||||||||||
exercise | remaining | value | exercise | value | |||||||||||||||||||||||||||||||||||||
price per | contractual | price per | |||||||||||||||||||||||||||||||||||||||
share | life (years) | share | |||||||||||||||||||||||||||||||||||||||
$ | 2.4 | - | $ | 2.92 | 467,410 | $ | 2.73 | 1.9 | $ | 7,605,899 | 443,444 | $ | 2.72 | $ | 7,220,526 | ||||||||||||||||||||||||||
$ | 3 | - | $ | 5.76 | 213,312 | $ | 5.09 | 3.5 | 2,967,841 | 139,685 | $ | 4.85 | 1,976,136 | ||||||||||||||||||||||||||||
$ | 8.56 | - | $ | 10.16 | 119,126 | $ | 9.12 | 5 | 1,176,925 | 43,141 | $ | 9.06 | 428,645 | ||||||||||||||||||||||||||||
$ | 14.67 | - | $ | 19.41 | 143,475 | $ | 16.92 | 6 | 317,281 | 26,875 | $ | 15.37 | 97,469 | ||||||||||||||||||||||||||||
943,323 | $ | 6.23 | 3.2 | $ | 12,067,946 | 653,145 | $ | 4.11 | $ | 9,722,776 | |||||||||||||||||||||||||||||||
Total unrecognized compensation cost relating to unvested stock options at March 31, 2015, prior to the consideration of expected forfeitures, was approximately $1,228,825 and is expected to be recognized over a weighted average period of 2.4 years. | |||||||||||||||||||||||||||||||||||||||||
The Company recorded stock-based compensation of $125,048 and $100,977 for the three months ended March 31, 2015 and 2014, respectively. | |||||||||||||||||||||||||||||||||||||||||
The Company has not capitalized any stock-based compensation expense as part of the cost of an asset. |
Note_16_Fair_Value_Measurement
Note 16 - Fair Value Measurement | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Disclosures [Text Block] | 16. FAIR VALUE MEASUREMENT | ||||||||||||||||
ASC Topic 820, “Fair Value Measurements and Disclosures” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company's own assumptions used to measure assets and liabilities at fair value. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. | |||||||||||||||||
The following table provides a summary of the fair values of the Company's derivative instrument assets and liabilities measured at fair value on a recurring basis at March 31, 2015: | |||||||||||||||||
31-Mar-15 | |||||||||||||||||
Fair Value Measurements Using | Liabilities at | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
Derivative instrument liability | $ | — | $ | 2,139,268 | $ | — | $ | 2,139,268 | |||||||||
Total Liabilities | $ | — | $ | 2,139,268 | $ | — | $ | 2,139,268 | |||||||||
The following table provides a summary of the fair values of the Company's derivative instrument assets measured at fair value on a recurring basis as at December 31, 2014: | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
Fair Value Measurements Using | Liabilities at | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
Derivative instrument liability | $ | — | $ | 1,115,805 | $ | — | $ | 1,115,805 | |||||||||
Total Liabilities | $ | — | $ | 1,115,805 | $ | — | $ | 1,115,805 | |||||||||
The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accreditation fees payable, customer deposits, loan payable and accrued liabilities approximate their fair values due to the relatively short periods to maturity of the instruments. |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Accounting Policies [Abstract] | |||||
Revenue Recognition, Policy [Policy Text Block] | (a) Revenue recognition | ||||
The Company’s revenues are derived from domain name registration fees on both a wholesale and retail basis, the sale of domain names, the provisioning of other Internet services and advertising and other revenue. Amounts received in advance of meeting the revenue recognition criteria described below are recorded as deferred revenue. | |||||
The Company earns registration fees in connection with each new, renewed and transferred-in registration and from providing provisioning of other Internet services to resellers and registrars on a monthly basis. Service has been provided in connection with registration fees once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards. | |||||
Domain names are generally purchased for terms of one to ten years. Registration fees charged for domain name registration and provisioning services are recognized on a straight-line basis over the life of the contracted term. Other Internet services that are provisioned for annual periods or longer, are recognized on a straight-line basis over the life of the contracted term. Other Internet services that are provisioned on a monthly basis are recognized as services are provided. | |||||
For arrangements with multiple deliverables, the Company allocates revenue to each deliverable if the delivered item(s) has value to the customer on a standalone basis and, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The fair value of the selling price for a deliverable is determined using a hierarchy of (1) Company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price. The Company allocates any arrangement fee to each of the elements based on their relative selling prices. | |||||
Revenue generated from the sale of domain names, earned from transferring the rights to domain names under the Company’s control, are recognized once the rights have been transferred and payment has been received in full. | |||||
The Company derives revenues from the provisioning of mobile phone and fixed Internet access services through its Ting website. These revenues are recognized once services have been provided. Revenues for wireless services are billed based on the actual amount of monthly services utilized by each customer during their billing cycle on a postpaid basis. The Company’s billing cycle for each customer is computed based on the customer’s activation date. As a result, the Company estimates the amount of revenues earned but not billed from the end of each billing cycle to the end of each reporting period. In addition, revenues associated with the sale of wireless devices and accessories to subscribers is recognized when title and risk of loss is transferred to the subscriber and shipment has occurred. Incentive marketing credits given to customers are recorded as a reduction of revenue. | |||||
The Company also generates advertising and other revenue through its online libraries of shareware, freeware and online services presented on its website. Advertising revenue includes revenue derived from cost-per action advertising links we display on third party websites who provide syndicated pay-per-click advertising on OpenSRS Domain Expiry Stream domains and the Company’s Portfolio Domains. In addition, the Company uses third party partners to derive pay-per-click advertising on the Tucow.com website. Advertising revenue is recognized on a monthly basis based on the number of cost-per-action services that were provided in the month. | |||||
In those cases where payment is not received at the time of sale, additional conditions for recognition of revenue are that the collection of the related accounts receivable is reasonably assured and the Company has no further performance obligations. The Company records costs that reflect expected refunds, rebates and credit card charge-backs as a reduction of revenues at the time of the sale based on historical experiences and current expectations. | |||||
The Company establishes provisions for possible uncollectible accounts receivable and other contingent liabilities which may arise in the normal course of business. Historically, credit losses have been within the Company’s expectations and the provisions the Company has established have been appropriate. However, the Company has, on occasion, experienced issues which have led to accounts receivable not being fully collected. Should these issues occur more frequently, additional provisions may be required. | |||||
Property, Plant and Equipment, Policy [Policy Text Block] | (b) Property and equipment | ||||
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is provided on a straight-line basis so as to depreciate the cost of depreciable assets over their estimated useful lives at the following rates: | |||||
Asset | Rate | ||||
Computer equipment | 30 | % | |||
Computer software | 100 | % | |||
Furniture and equipment | 20 | % | |||
Vehicles | 20 | % | |||
Fiber network (years) | 15 | ||||
Customer equipment and installations (years) | 3 | ||||
Leasehold improvements | Over term of lease | ||||
The Company reviews the carrying values of its property and equipment for potential impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the estimated undiscounted future cash flows expected to result from the use of the group of assets and its eventual disposition is less than its carrying amount, it is considered to be impaired. The amount of the impairment loss recognized is measured as the amount by which the carrying value of the asset exceeds the fair value of the asset, with fair value being determined based upon discounted cash flows or appraised values, depending on the nature of the assets. | |||||
Additions to the fiber network are recorded at cost, including all material, labour, vehicle and installation and construction costs and certain indirect costs associated with the construction of cable transmission and distribution facilities. While the Company’s capitalization is based on specific activities, once capitalized, costs are tracked by fixed asset category at the fiber network level and not on a specific asset basis. For assets that are retired, the estimated historical cost and related accumulated depreciation is removed. | |||||
Costs associated with initial customer installation include materials, labour, vehicle and installation and construction costs and certain indirect costs. Indirect costs are associated with the activities of the Company’s personnel who assist in connecting and activating the new service and consist of compensation and other costs associated with these support functions. | |||||
The costs of disconnecting service at a customer’s dwelling or reconnecting service to a previously installed dwelling are charged to operating expense in the period incurred. Costs for repairs and maintenance are charged to operating expense as incurred, while plant and equipment replacement and betterments, including replacement of cable drops from pole to the dwelling, are capitalized. | |||||
Derivatives, Policy [Policy Text Block] | (c) Derivative Financial Instruments | ||||
During the three months ended March 31, 2015 and the year ended December 31, 2014 ("Fiscal 2014"), we used derivative financial instruments to manage foreign currency exchange risk. We account for these instruments in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 815, “Derivatives and Hedging” ("Topic 815"), which requires that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at its fair value as of the reporting date. Topic 815 also requires that changes in our derivative financial instruments’ fair values be recognized in earnings, unless specific hedge accounting and documentation criteria are met (i.e. the instruments are accounted for as hedges). We recorded the effective portions of the gain or loss on derivative financial instruments that were designated as cash flow hedges in accumulated other comprehensive income in our accompanying Consolidated Balance Sheets. Any ineffective or excluded portion of a designated cash flow hedge, if applicable, is recognized in net income. | |||||
For certain contracts, the Company has not complied with the documentation standards required for its forward foreign exchange contracts to be accounted for as hedges and has, therefore, accounted for such forward foreign exchange contracts at their fair values with the changes in fair value recorded in net income. | |||||
The fair value of the forward exchange contracts are determined using an estimated credit adjusted mark-to-market valuation which takes into consideration the Company's and the counterparty's credit risk. The valuation technique used to measure the fair values of the derivative instruments is a discounted cash flow technique, with all significant inputs derived from or corroborated by observable market data, as no quoted market prices exist for the derivative instruments. Our discounted cash flow techniques use observable market inputs, such as foreign currency spot and forward rates. | |||||
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements Adopted | ||||
In May 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new standard provides a single principles-based, five-step model to be applied to all contracts with customers, which steps are to (1) identify the contract(s) with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when each performance obligation is satisfied. More specifically, revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. ASU 2014-09 will be effective, reflecting the one-year proposed deferral, for interim and annual periods beginning after December 15, 2017 (January 1, 2018 for the Company). Early adoption of the standard is permitted but not before the original effective date. Companies can transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is currently in the process of evaluating the impact that the adoption of ASU 2014-09 will have on its consolidated financial statements and the selected method of transition to the new standard. | |||||
In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), which provides guidance in determining whether fees for purchasing cloud computing services (or hosted software solutions) are considered internal-use software or should be considered a service contract. The cloud computing agreement that includes a software license should be accounted for in the same manner as internal-use software if customer has contractual right to take possession of the software during the hosting period without significant penalty and it is feasible to either run the software on customer’s hardware or contract with another vendor to host the software. Arrangements that don’t meet the requirements for internal-use software should be accounted for as a service contract. ASU 2015-05 will be effective for interim and annual periods beginning after December 15, 2015 (January 1, 2016 for the Company). Early adoption of the standard is permitted. The Company is currently in the process of evaluating the impact that the adoption of ASU 2015-05 will have on its consolidated financial statements. |
Note_2_Basis_of_Presentation_T
Note 2 - Basis of Presentation (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Disclosure Text Block [Abstract] | |||||
Schedule of Depreciation Rates [Table Text Block] | Asset | Rate | |||
Computer equipment | 30 | % | |||
Computer software | 100 | % | |||
Furniture and equipment | 20 | % | |||
Vehicles | 20 | % | |||
Fiber network (years) | 15 | ||||
Customer equipment and installations (years) | 3 | ||||
Leasehold improvements | Over term of lease |
Note_4_Acquisitions_and_Divest1
Note 4 - Acquisitions and Divestitures (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Business Combinations [Abstract] | |||||
Business Acquisition Purchase Consideration [Table Text Block] | Cash | $ | 3,135,140 | ||
Assumption of debt | 418,775 | ||||
Redeemable non-controlling interest | 3,000,000 | ||||
$ | 6,553,915 | ||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | Current assets (including cash of $21,423) | $ | 338,577 | ||
Current liabilities | (529,702 | ) | |||
Property and equipment, including: | |||||
Fiber network | 3,456,024 | ||||
Computer equipment | 200,000 | ||||
Furniture and equipment | 5,000 | ||||
Vehicles | 92,000 | ||||
Leasehold improvements | 50,000 | ||||
Intangible assets, including: | |||||
Network rights | 692,000 | ||||
Customer relationships | 68,000 | ||||
Goodwill | 2,182,016 | ||||
Net assets acquired | $ | 6,553,915 |
Note_5_Other_Assets_Tables
Note 5 - Other Assets (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure Text Block Supplement [Abstract] | |||||||||
Schedule of Other Assets [Table Text Block] | Year ended | Year ended | |||||||
March 31, 2015 | 31-Dec-14 | ||||||||
Amounts in escrow advanced to acquire a controlling ownership interest in Ting Virginia, LLC (see note 4) | $ | — | $ | 3,125,000 | |||||
Amounts advanced to the joint venture with Radix FZC and NameCheap Inc. which was terminated in February 2015 (note 10) | — | 5,074,000 | |||||||
$ | — | $ | 8,199,000 |
Note_6_Derivative_Instruments_1
Note 6 - Derivative Instruments and Hedging Activities (Tables) | 3 Months Ended | ||||||||||||||
Mar. 31, 2015 | |||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | As of | As of | |||||||||||||
March 31, | December 31, | ||||||||||||||
2015 | 2014 | ||||||||||||||
Derivatives | Balance Sheet | Fair Value | Fair Value | ||||||||||||
Location | Asset | Asset | |||||||||||||
(Liability) | (Liability) | ||||||||||||||
Foreign currency forward contracts not designated as cash flow hedges | Derivative instruments | $ | (327,922 | ) | $ | (169,129 | ) | ||||||||
Foreign currency forward contracts designated as cash flow hedges | Derivative instruments | $ | (1,811,346 | ) | $ | (946,676 | ) | ||||||||
Total foreign currency forward contracts | Derivative instruments | $ | (2,139,268 | ) | $ | (1,115,805 | ) | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Gains and losses on cash flow hedges | Tax impact | Total AOCI | ||||||||||||
Opening AOCI balance – December 31, 2014 | $ | (946,676 | ) | $ | 324,235 | $ | (622,441 | ) | |||||||
Other comprehensive income (loss)before reclassifications | (1,510,346 | ) | 549,480 | (960,866 | ) | ||||||||||
Amount reclassified from accumulated other comprehensive income | 645,676 | (229,602 | ) | 416,074 | |||||||||||
Other comprehensive income (loss) for the three months ended March 31, 2015 | (864,670 | ) | 319,878 | (544,792 | ) | ||||||||||
Ending AOCI balance – March 31, 2015 | $ | (1,811,346 | ) | $ | 644,113 | $ | (1,167,233 | ) | |||||||
Derivative Instruments, Gain (Loss) [Table Text Block] | Derivatives in Cash Flow | Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) | |||||||||
Hedging Relationship | |||||||||||||||
Operating expenses | $ | (301,590 | ) | ||||||||||||
Foreign currency forward contracts for the three months ended March 31, 2015 | $ | (544,792 | ) | Cost of revenues | (114,484 | ) | Operating expenses | $ | (15,419 | ) | |||||
Operating expenses | $ | (168,620 | ) | ||||||||||||
Foreign currency forward contracts for the three months ended March 31, 2014 | $ | (215,467 | ) | Cost of revenues | (58,891 | ) | Operating expenses | $ | — |
Note_7_Goodwill_and_Other_Inta1
Note 7 - Goodwill and Other Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | Boardtown Corporation | Hosted | Innerwise Inc. | Mailbank.com Inc. | EPAG Domainservices GmbH | BRI Group | Total | ||||||||||||||||||||||
Messaging | |||||||||||||||||||||||||||||
Assets of | |||||||||||||||||||||||||||||
Critical Path | |||||||||||||||||||||||||||||
Balances, December 31, 2014 | $ | 2,044,847 | $ | 4,072,297 | $ | 5,801,040 | $ | 6,072,623 | $ | 882,320 | $ | - | $ | 18,873,127 | |||||||||||||||
Acquisition of BRI Group, February 2015 | - | - | - | - | - | 2,182,016 | 2,182,016 | ||||||||||||||||||||||
Balances, March 31, 2015 | $ | 2,044,847 | $ | 4,072,297 | $ | 5,801,040 | $ | 6,072,623 | $ | 882,320 | $ | 2,182,016 | $ | 21,055,143 | |||||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | Brand | Customer relationships | Network rights | Surname domain names | Direct navigation domain names | ||||||||||||||||||||||||
7 years | 4 - 7 years | 15 years | indefinite life | indefinite life | Total | ||||||||||||||||||||||||
Net book value, December 31, 2014 | $ | 110,510 | $ | 625,220 | $ | - | $ | 11,525,624 | $ | 1,941,231 | $ | 14,202,585 | |||||||||||||||||
Acquisition of BRI Group, February 2015 | - | 68,000 | 692,000 | - | - | 760,000 | |||||||||||||||||||||||
Sales of domain names | - | - | - | (1,623 | ) | (4,705 | ) | (6,328 | ) | ||||||||||||||||||||
Impairment of domain names | - | - | - | (7,788 | ) | (4,705 | ) | (12,493 | ) | ||||||||||||||||||||
Amortization expense | (7,710 | ) | (45,505 | ) | (3,924 | ) | - | - | (57,139 | ) | |||||||||||||||||||
Net book value, March 31, 2015 | $ | 102,800 | $ | 647,715 | $ | 688,076 | $ | 11,516,213 | $ | 1,931,821 | $ | 14,886,625 |
Note_11_Basic_and_Diluted_Earn1
Note 11 - Basic and Diluted Earnings per Common Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Three months | Three months | |||||||
ended | ended | ||||||||
31-Mar-15 | 31-Mar-14 | ||||||||
Numerator for basic and diluted earnings per common share: | |||||||||
Net income for the period | $ | 2,833,943 | $ | 476,839 | |||||
Denominator for basic and diluted earnings per common share: | |||||||||
Basic weighted average number of common shares outstanding | 11,142,628 | 11,028,559 | |||||||
Effect of outstanding stock options | 437,419 | 611,058 | |||||||
Diluted weighted average number of shares outstanding | 11,580,047 | 11,639,617 | |||||||
Basic earnings per common share | $ | 0.25 | $ | 0.04 | |||||
Diluted earnings per common share | $ | 0.24 | $ | 0.04 |
Note_12_Segment_Reporting_Tabl
Note 12 - Segment Reporting (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Condensed Income Statement [Table Text Block] | Three months ended March 31, 2015 | Domain Name | Network | Consolidated | |||||||||||||
Services | Access | Totals | |||||||||||||||
Services | |||||||||||||||||
Net Revenues | $ | 27,540,819 | $ | 12,927,014 | $ | 40,467,833 | |||||||||||
Cost of Revenues | 19,476,217 | 7,345,157 | 26,821,374 | ||||||||||||||
Gross Profit before network expenses | 8,064,602 | 5,581,857 | 13,646,459 | ||||||||||||||
Network expenses | 1,425,662 | ||||||||||||||||
Gross Profit | 12,220,797 | ||||||||||||||||
Expenses: | |||||||||||||||||
Sales and marketing | 3,799,175 | ||||||||||||||||
Technical operations and development | 1,114,195 | ||||||||||||||||
General and administrative | 1,815,188 | ||||||||||||||||
Depreciation of property and equipment | 59,262 | ||||||||||||||||
Amortization of intangibles | 53,215 | ||||||||||||||||
Impairment of indefinite life intangible assets | 12,493 | ||||||||||||||||
Loss on currency forward contracts | 956,858 | ||||||||||||||||
Income from operations | 4,410,411 | ||||||||||||||||
Other expenses, net | 24,775 | ||||||||||||||||
Income before provision for income taxes | $ | 4,385,636 | |||||||||||||||
Three months ended March 31, 2014 | Domain Name | Network | Consolidated | ||||||||||||||
Services | Access | Totals | |||||||||||||||
Services | |||||||||||||||||
Net Revenues | $ | 27,690,262 | $ | 6,712,132 | $ | 34,402,394 | |||||||||||
Cost of Revenues | 20,035,208 | 4,281,431 | 24,316,639 | ||||||||||||||
Gross Profit before network expenses | 7,655,054 | 2,430,701 | 10,085,755 | ||||||||||||||
Network expenses | 1,326,618 | ||||||||||||||||
Gross Profit | 8,759,137 | ||||||||||||||||
Expenses: | |||||||||||||||||
Sales and marketing | 4,021,774 | ||||||||||||||||
Technical operations and development | 1,089,898 | ||||||||||||||||
General and administrative | 1,767,800 | ||||||||||||||||
Depreciation of property and equipment | 56,304 | ||||||||||||||||
Amortization of intangibles | 219,030 | ||||||||||||||||
Impairment of indefinite life intangible assets | 250,688 | ||||||||||||||||
Loss on currency forward contracts | 551,371 | ||||||||||||||||
Income from operations | 802,272 | ||||||||||||||||
Other expenses, net | 73,833 | ||||||||||||||||
Income before provision for income taxes | $ | 728,439 | |||||||||||||||
Schedule Of Operating Income By Revenue Stream [Table Text Block] | Three months ended March 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Domain Services: | |||||||||||||||||
Wholesale | |||||||||||||||||
Domain Services | $ | 21,175,131 | $ | 21,648,954 | |||||||||||||
Value Added Services | 2,241,998 | 2,603,605 | |||||||||||||||
Total Wholesale | 23,417,129 | 24,252,559 | |||||||||||||||
Retail | 2,875,728 | 2,384,063 | |||||||||||||||
Portfolio | 1,247,962 | 1,053,640 | |||||||||||||||
Total Domain Services | 27,540,819 | 27,690,262 | |||||||||||||||
Network Access Services: | |||||||||||||||||
Ting | 12,927,014 | 6,712,132 | |||||||||||||||
Total Network Access Services | 12,927,014 | 6,712,132 | |||||||||||||||
$ | 40,467,833 | $ | 34,402,394 | ||||||||||||||
Schedule of Cost of Revenues by Revenue Stream [Table Text Block] | Three months ended March 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Domain Services: | |||||||||||||||||
Wholesale | |||||||||||||||||
Domain Services | $ | 17,548,027 | $ | 18,235,215 | |||||||||||||
Value Added Services | 536,132 | 540,722 | |||||||||||||||
Total Wholesale | 18,084,159 | 18,775,937 | |||||||||||||||
Retail | 1,220,500 | 1,015,416 | |||||||||||||||
Portfolio | 171,558 | 243,855 | |||||||||||||||
Total Domain Services | 19,476,217 | 20,035,208 | |||||||||||||||
Network Access Services: | |||||||||||||||||
Ting | 7,345,157 | 4,281,431 | |||||||||||||||
Total Network Access Services | 7,345,157 | 4,281,431 | |||||||||||||||
Network Expenses: | |||||||||||||||||
Network, other costs | 1,222,096 | 1,143,644 | |||||||||||||||
Network, depreciation and amortization costs | 203,566 | 182,974 | |||||||||||||||
Total Network Expenses | 1,425,662 | 1,326,618 | |||||||||||||||
$ | 28,247,036 | $ | 25,643,257 | ||||||||||||||
Schedule Of Property, Plant, and Equipment By Geographic Region [TableText Block] | March 31, | December 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
Canada | $ | 1,122,910 | $ | 1,131,883 | |||||||||||||
United States | 4,145,540 | 379,891 | |||||||||||||||
Germany | 77,620 | 98,013 | |||||||||||||||
$ | 5,346,070 | $ | 1,609,787 | ||||||||||||||
Schedule of Acquired Intangible Assets by Major Class [Table Text Block] | March 31, | December 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
United States | $ | 754,191 | $ | — | |||||||||||||
Germany | 684,400 | 735,730 | |||||||||||||||
$ | 1,438,591 | $ | 735,730 | ||||||||||||||
Schedule of Deferred Tax asset, Net by Geographic Region [Table Text Block] | March 31, | December 31, | |||||||||||||||
2015 | 2014 | ||||||||||||||||
Canada | $ | 8,107,573 | $ | 7,378,619 | |||||||||||||
$ | 8,107,573 | $ | 7,378,619 | ||||||||||||||
Allowance for Credit Losses on Financing Receivables [Table Text Block] | Balance at | Charged to | Write-offs | Balance at | |||||||||||||
beginning | (recovered) | during | end of | ||||||||||||||
period | costs and | period | period | ||||||||||||||
expenses | |||||||||||||||||
Allowance for doubtful accounts, excluding provision for credit notes | |||||||||||||||||
Three months ended March 31, 2015 | $ | 125,766 | $ | 3,996 | $ | — | $ | 121,770 | |||||||||
Year ended December 31, 2014 | $ | 91,226 | $ | (34,540 | ) | $ | — | $ | 125,766 |
Note_14_Stockholders_Equity_Ta
Note 14 - Stockholders' Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] | Accumulated | ||||||||||||||||||||||||
Additional | other | Total | |||||||||||||||||||||||
Common stock | paid in | comprehensive | stockholders | ||||||||||||||||||||||
Number | Amount | capital | Deficit | income | equity | ||||||||||||||||||||
Balance, December 31, 2014 | 11,329,732 | $ | 14,130,059 | $ | 29,090,058 | $ | (6,955,283 | ) | $ | (622,441 | ) | $ | 35,642,393 | ||||||||||||
Exercise of stock options | 74,997 | 360,949 | (112,966 | ) | - | - | 247,983 | ||||||||||||||||||
Repurchase and retirement of shares | (407,996 | ) | (516,003 | ) | (7,196,142 | ) | - | - | (7,712,145 | ) | |||||||||||||||
Stock-based compensation | - | - | 125,048 | - | - | 125,048 | |||||||||||||||||||
Income tax effect related to stock options exercised | - | - | 412,642 | - | - | 412,642 | |||||||||||||||||||
Net income for the period | - | - | - | 2,833,943 | - | 2,833,943 | |||||||||||||||||||
Unrealized loss on foreign currency forward contracts treated as hedges | - | - | - | - | (960,866 | ) | (960,866 | ) | |||||||||||||||||
Reclassification to net income due to settlement of foreign currency forward contracts treated as hedges | - | - | - | - | 416,074 | 416,074 | |||||||||||||||||||
Balance, March 31, 2015 | 10,996,733 | $ | 13,975,005 | $ | 22,318,640 | $ | (4,121,340 | ) | $ | (1,167,233 | ) | $ | 31,005,072 |
Note_15_Sharebased_Payments_Ta
Note 15 - Share-based Payments (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Three months ended | Three months ended | |||||||||||||||||||||||||||||||||||||||
31-Mar-15 | 31-Mar-14 | ||||||||||||||||||||||||||||||||||||||||
Number of | Weighted | Number of | Weighted | ||||||||||||||||||||||||||||||||||||||
Shares | Average | Shares | Average | ||||||||||||||||||||||||||||||||||||||
exercise price | exercise price | ||||||||||||||||||||||||||||||||||||||||
per share | per share | ||||||||||||||||||||||||||||||||||||||||
Outstanding, beginning of period | 976,062 | $ | 5.41 | 1,407,639 | $ | 3.8 | |||||||||||||||||||||||||||||||||||
Granted | 45,000 | 19.41 | — | — | |||||||||||||||||||||||||||||||||||||
Exercised | (74,997 | ) | 3.31 | (291,913 | ) | 3.12 | |||||||||||||||||||||||||||||||||||
Forfeited | (2,742 | ) | 12.15 | (5,594 | ) | 5.56 | |||||||||||||||||||||||||||||||||||
Expired | — | — | (2,875 | ) | 3.4 | ||||||||||||||||||||||||||||||||||||
Outstanding, end of period | 943,323 | $ | 6.23 | 1,107,257 | $ | 3.97 | |||||||||||||||||||||||||||||||||||
Options exercisable, end of period | 653,145 | $ | 4.11 | 753,506 | $ | 3.15 | |||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | Options outstanding | Options exercisable | |||||||||||||||||||||||||||||||||||||||
Exercise | Outstanding | Weighted | Weighted | Aggregate | Number | Weighted | Aggregate | ||||||||||||||||||||||||||||||||||
price | Number | average | Average | intrinsic | exercisable | average | intrinsic | ||||||||||||||||||||||||||||||||||
exercise | remaining | value | exercise | value | |||||||||||||||||||||||||||||||||||||
price per | contractual | price per | |||||||||||||||||||||||||||||||||||||||
share | life (years) | share | |||||||||||||||||||||||||||||||||||||||
$ | 2.4 | - | $ | 2.92 | 467,410 | $ | 2.73 | 1.9 | $ | 7,605,899 | 443,444 | $ | 2.72 | $ | 7,220,526 | ||||||||||||||||||||||||||
$ | 3 | - | $ | 5.76 | 213,312 | $ | 5.09 | 3.5 | 2,967,841 | 139,685 | $ | 4.85 | 1,976,136 | ||||||||||||||||||||||||||||
$ | 8.56 | - | $ | 10.16 | 119,126 | $ | 9.12 | 5 | 1,176,925 | 43,141 | $ | 9.06 | 428,645 | ||||||||||||||||||||||||||||
$ | 14.67 | - | $ | 19.41 | 143,475 | $ | 16.92 | 6 | 317,281 | 26,875 | $ | 15.37 | 97,469 | ||||||||||||||||||||||||||||
943,323 | $ | 6.23 | 3.2 | $ | 12,067,946 | 653,145 | $ | 4.11 | $ | 9,722,776 |
Note_16_Fair_Value_Measurement1
Note 16 - Fair Value Measurement (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block] | 31-Mar-15 | ||||||||||||||||
Fair Value Measurements Using | Liabilities at | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
Derivative instrument liability | $ | — | $ | 2,139,268 | $ | — | $ | 2,139,268 | |||||||||
Total Liabilities | $ | — | $ | 2,139,268 | $ | — | $ | 2,139,268 | |||||||||
31-Dec-14 | |||||||||||||||||
Fair Value Measurements Using | Liabilities at | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||
Derivative instrument liability | $ | — | $ | 1,115,805 | $ | — | $ | 1,115,805 | |||||||||
Total Liabilities | $ | — | $ | 1,115,805 | $ | — | $ | 1,115,805 |
Note_2_Basis_of_Presentation_D
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates | 3 Months Ended |
Mar. 31, 2015 | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Leasehold improvements | Over term of lease |
Computer Equipment [Member] | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Depreciation rate | 0.3 |
Computer Software [Member] | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Depreciation rate | 1 |
Furniture and Fixtures [Member] | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Depreciation rate | 0.2 |
Vehicles [Member] | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Depreciation rate | 0.2 |
Fiber Network [Member] | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Depreciation term | 15 years |
Customer Equipment and Installations [Member] | |
Note 2 - Basis of Presentation (Details) - Summary of Property, Plant and Equipment Depreciation Rates [Line Items] | |
Depreciation term | 3 years |
Note_4_Acquisitions_and_Divest2
Note 4 - Acquisitions and Divestitures (Details) (Ting Virginia, LLC [Member], USD $) | 0 Months Ended | 3 Months Ended | |||
Feb. 27, 2015 | Feb. 17, 2015 | Mar. 31, 2015 | Feb. 27, 2015 | Feb. 17, 2015 | |
Note 4 - Acquisitions and Divestitures (Details) [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 70.00% | 70.00% | 70.00% | 70.00% | |
Business Combination, Consideration Transferred | $3,600,000 | ||||
Payments to Acquire Businesses, Gross | 3,135,140 | 3,100,000 | 407,493 | ||
Business Combination Customers Acquired Number | 3,000 | ||||
Business Combination, Interest Subject to Put and Call Option Exercise | 30.00% | 30.00% | |||
Business Combination, Put Option Excercisable Term | 7 days | ||||
Business Combination, Interest Subject to Put Option Exercise | 10.00% | ||||
Business Combination, Consideration to be Transfered upon Exercise of Options per Percentage Point | 100,000 | 100,000 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 200,000 | 200,000 | |||
Additional Cash Provided at Closing [Member] | |||||
Note 4 - Acquisitions and Divestitures (Details) [Line Items] | |||||
Payments to Acquire Businesses, Gross | 400,000 | ||||
Exercisable by the Minority Shareholders [Member] | Exercisable on Fourth Anniversary of Business Combination [Member] | |||||
Note 4 - Acquisitions and Divestitures (Details) [Line Items] | |||||
Business Combination, Consideration to be Transfered upon Exercise of Options per Percentage Point | 120,000 | 120,000 | |||
Business Combination Consideration Transferred on Option Exercise | 3,600,000 | 3,600,000 | |||
Derivatives Embedded in Business Combination Agreement [Member] | |||||
Note 4 - Acquisitions and Divestitures (Details) [Line Items] | |||||
Business Combination, Contingent Consideration, Liability | $3,000,000 | $3,000,000 | |||
Exercisable on Second Anniversary of Business Combination [Member] | |||||
Note 4 - Acquisitions and Divestitures (Details) [Line Items] | |||||
Business Combination, Interest Subject to Call Option Exercise | 20.00% | 20.00% |
Note_4_Acquisitions_and_Divest3
Note 4 - Acquisitions and Divestitures (Details) - Preliminary Purchase Consideration (Ting Virginia, LLC [Member], USD $) | 0 Months Ended | 3 Months Ended | |
Feb. 27, 2015 | Feb. 17, 2015 | Mar. 31, 2015 | |
Ting Virginia, LLC [Member] | |||
Note 4 - Acquisitions and Divestitures (Details) - Preliminary Purchase Consideration [Line Items] | |||
Cash | $3,135,140 | $3,100,000 | $407,493 |
Assumption of debt | 418,775 | ||
Redeemable non-controlling interest | 3,000,000 | ||
$6,553,915 |
Note_4_Acquisitions_and_Divest4
Note 4 - Acquisitions and Divestitures (Details) - Purchase Price Allocation (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Feb. 27, 2015 |
Intangible assets, including: | |||
Goodwill | $21,055,143 | $18,873,127 | |
Fiber Network [Member] | Ting Virginia, LLC [Member] | |||
Property and equipment, including: | |||
Property and Equipment | 3,456,024 | ||
Computer Equipment [Member] | Ting Virginia, LLC [Member] | |||
Property and equipment, including: | |||
Property and Equipment | 200,000 | ||
Furniture and Fixtures [Member] | Ting Virginia, LLC [Member] | |||
Property and equipment, including: | |||
Property and Equipment | 5,000 | ||
Vehicles [Member] | Ting Virginia, LLC [Member] | |||
Property and equipment, including: | |||
Property and Equipment | 92,000 | ||
Leasehold Improvements [Member] | Ting Virginia, LLC [Member] | |||
Property and equipment, including: | |||
Property and Equipment | 50,000 | ||
Ting Virginia, LLC [Member] | Network Rights [Member] | |||
Intangible assets, including: | |||
Intangible Assets | 692,000 | ||
Ting Virginia, LLC [Member] | Customer Relationships [Member] | |||
Intangible assets, including: | |||
Intangible Assets | 68,000 | ||
Ting Virginia, LLC [Member] | |||
Note 4 - Acquisitions and Divestitures (Details) - Purchase Price Allocation [Line Items] | |||
Current assets (including cash of $21,423) | 338,577 | ||
Current liabilities | -529,702 | ||
Intangible assets, including: | |||
Goodwill | 2,182,016 | ||
Net assets acquired | $6,553,915 |
Note_4_Acquisitions_and_Divest5
Note 4 - Acquisitions and Divestitures (Details) - Purchase Price Allocation (Parentheticals) (Ting Virginia, LLC [Member], USD $) | Feb. 27, 2015 |
Ting Virginia, LLC [Member] | |
Note 4 - Acquisitions and Divestitures (Details) - Purchase Price Allocation (Parentheticals) [Line Items] | |
cash | $21,423 |
Note_5_Other_Assets_Details_Su
Note 5 - Other Assets (Details) - Summary Other Assets (USD $) | Dec. 31, 2014 |
Note 5 - Other Assets (Details) - Summary Other Assets [Line Items] | |
Other assets | $8,199,000 |
Radix FZC And NameCheap Inc. [Member] | |
Note 5 - Other Assets (Details) - Summary Other Assets [Line Items] | |
Other assets | 5,074,000 |
Ting Virginia, LLC [Member] | |
Note 5 - Other Assets (Details) - Summary Other Assets [Line Items] | |
Other assets | $3,125,000 |
Note_6_Derivative_Instruments_2
Note 6 - Derivative Instruments and Hedging Activities (Details) (Forward Contracts [Member], USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Note 6 - Derivative Instruments and Hedging Activities (Details) [Line Items] | ||
Derivative, Notional Amount | $19.50 | $20.10 |
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | -0.1 | -0.1 |
Designated as Hedging Instrument [Member] | ||
Note 6 - Derivative Instruments and Hedging Activities (Details) [Line Items] | ||
Derivative, Notional Amount | 16.5 | 15.6 |
Not Designated as Hedging Instrument [Member] | ||
Note 6 - Derivative Instruments and Hedging Activities (Details) [Line Items] | ||
Derivative, Loss on Derivative | $0.20 | $0.10 |
Note_6_Derivative_Instruments_3
Note 6 - Derivative Instruments and Hedging Activities (Details) - Fair Value of Derivative Instruments in the Consolidated Balance Sheets (Derivative Instruments [Member], USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward contracts | ($2,139,268) | ($1,115,805) |
Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward contracts | -327,922 | -169,129 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Foreign currency forward contracts | ($1,811,346) | ($946,676) |
Note_6_Derivative_Instruments_4
Note 6 - Derivative Instruments and Hedging Activities (Details) - Movement in AOCI Balance (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Movement in AOCI Balance [Abstract] | ||
Opening AOCI balance b December 31, 2014 | ($946,676) | |
Opening AOCI balance b December 31, 2014 | 324,235 | |
Opening AOCI balance b December 31, 2014 | -622,441 | |
Other comprehensive income (loss)before reclassifications | -1,510,346 | |
Other comprehensive income (loss)before reclassifications | 549,480 | |
Other comprehensive income (loss)before reclassifications | -960,866 | -442,978 |
Amount reclassified from accumulated other comprehensive income | 645,676 | |
Amount reclassified from accumulated other comprehensive income | -229,602 | |
Amount reclassified from accumulated other comprehensive income | 416,074 | 227,511 |
Other comprehensive income (loss) for the three months ended March 31, 2015 | -864,670 | |
Other comprehensive income (loss) for the three months ended March 31, 2015 | 319,878 | |
Other comprehensive income (loss) for the three months ended March 31, 2015 | -544,792 | |
Ending AOCI balance b March 31, 2015 | -1,811,346 | |
Ending AOCI balance b March 31, 2015 | 644,113 | |
Ending AOCI balance b March 31, 2015 | ($1,167,233) |
Note_6_Derivative_Instruments_5
Note 6 - Derivative Instruments and Hedging Activities (Details) - Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Operating Expense [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | ($301,590) | ($168,620) |
Cost of Revenues [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) | -544,792 | -215,467 |
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | -114,484 | -58,891 |
Amount of Gain or (Loss) Recognized in Income on Derivative (ineffective Portion and Amount Excluded from Effectiveness Testing) | ($15,419) |
Note_7_Goodwill_and_Other_Inta2
Note 7 - Goodwill and Other Intangible Assets (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Feb. 27, 2015 | Feb. 17, 2015 | |
Note 7 - Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | $5,700,000 | |||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 12,493 | 250,688 | ||
Domain Name Services [Member] | ||||
Note 7 - Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $12,493 | $300,000 | ||
Ting Virginia, LLC [Member] | ||||
Note 7 - Goodwill and Other Intangible Assets (Details) [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 70.00% | 70.00% |
Note_7_Goodwill_and_Other_Inta3
Note 7 - Goodwill and Other Intangible Assets (Details) - Goodwill (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Feb. 27, 2015 |
Goodwill [Line Items] | |||
Balances, | $21,055,143 | $18,873,127 | |
Domain Services [Member] | Boardtown Corporation [Member] | |||
Goodwill [Line Items] | |||
Balances, | 2,044,847 | 2,044,847 | |
Domain Services [Member] | Hosted Messaging Assets of Critical Path [Member] | |||
Goodwill [Line Items] | |||
Balances, | 4,072,297 | 4,072,297 | |
Domain Services [Member] | Innerwise Inc. [Member] | |||
Goodwill [Line Items] | |||
Balances, | 5,801,040 | 5,801,040 | |
Domain Services [Member] | Mailbank.com Inc. [Member] | |||
Goodwill [Line Items] | |||
Balances, | 6,072,623 | 6,072,623 | |
Domain Services [Member] | EPAG Domainservices GmbH [Member] | |||
Goodwill [Line Items] | |||
Balances, | 882,320 | 882,320 | |
Domain Services [Member] | Ting Virginia, LLC [Member] | |||
Goodwill [Line Items] | |||
Balances, | 2,182,016 | ||
Domain Services [Member] | |||
Goodwill [Line Items] | |||
Balances, | 21,055,143 | 18,873,127 | |
Ting Virginia, LLC [Member] | |||
Goodwill [Line Items] | |||
Balances, | $2,182,016 |
Note_7_Goodwill_and_Other_Inta4
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Net book value, December 31, 2014 | $14,202,585 | |
Sales of domain names | -6,328 | -1,622 |
Impairment of domain names | -12,493 | -250,688 |
Amortization expense | -57,139 | -219,030 |
Net book value, March 31, 2015 | 1,438,591 | 735,730 |
Net book value, March 31, 2015 | 14,886,625 | |
Customer Relationships [Member] | Maximum [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
7 years | ||
Surname Domain Names Indefinite Life [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Net book value, December 31, 2014 | 11,525,624 | |
Sales of domain names | -1,623 | |
Impairment of domain names | -7,788 | |
Net book value, March 31, 2015 | 11,516,213 | |
Direct Navigation Domain Names Indefinite Life [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Net book value, December 31, 2014 | 1,941,231 | |
Sales of domain names | -4,705 | |
Impairment of domain names | -4,705 | |
Net book value, March 31, 2015 | 1,931,821 | |
Minimum [Member] | Customer Relationships [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
4 years | ||
Ting Virginia, LLC [Member] | Customer Relationships [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Acquisition of BRI Group, February 2015 | 68,000 | |
Ting Virginia, LLC [Member] | Network Rights [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Acquisition of BRI Group, February 2015 | 692,000 | |
Ting Virginia, LLC [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Acquisition of BRI Group, February 2015 | 760,000 | |
Brand [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
7 years | ||
Net book value, December 31, 2014 | 110,510 | |
Amortization expense | -7,710 | |
Net book value, March 31, 2015 | 102,800 | |
Customer Relationships [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
Net book value, December 31, 2014 | 625,220 | |
Amortization expense | -45,505 | |
Net book value, March 31, 2015 | 647,715 | |
Network Rights [Member] | ||
Note 7 - Goodwill and Other Intangible Assets (Details) - Acquired Intangible Assets by Major Class [Line Items] | ||
15 years | ||
Amortization expense | -3,924 | |
Net book value, March 31, 2015 | $688,076 |
Note_8_Loan_Payable_Details
Note 8 - Loan Payable (Details) (USD $) | 0 Months Ended | 3 Months Ended |
Jan. 07, 2015 | Mar. 31, 2015 | |
Note 8 - Loan Payable (Details) [Line Items] | ||
Stock Repurchased and Retired During Period, Value | $7,712,145 | |
Stock Repurchased During Period, Transaction Costs | 70,000 | |
Line of Credit Facility, Covenant Period | 18 months | |
Foreign Exchange Risk [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 3,500,000 | |
Derivative Asset, Fair Value, Gross Asset | 19,500,000 | |
Operating Demand Loan [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,000,000 | |
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |
Debt Instrument, Fee Amount | 500 | |
Long-term Line of Credit | 0 | |
Dutch Auction Member | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Stock Repurchased and Retired During Period, Shares (in Shares) | 193,907 | |
Treasury Stock Acquired, Average Cost Per Share (in Dollars per share) | $18.50 | |
Stock Repurchased and Retired During Period, Value | 3,587,280 | |
Maximum [Member] | 2012 Demand Loan Facilities [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 14,000,000 | |
Line of Credit Facility Share Repurchase Limit | 2,000,000 | |
Base Rate [Member] | DLR Loan [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |
Base Rate [Member] | 2012 DLRR Loan [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |
London Interbank Offered Rate (LIBOR) [Member] | 2012 DLRR Loan [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.50% | |
2012 Demand Loan Facilities [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 14,000,000 | |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.20% | |
DLR Loan [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Long-term Debt | 3,500,000 | |
2012 DLRR Loan [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Debt Instrument, Term | 4 years | |
Amended Credit Facility [Member] | ||
Note 8 - Loan Payable (Details) [Line Items] | ||
Maximum Total Funded Debt To EBITDA Ratio | 2 | |
Minimum Fixed Charge Coverage | 1.2 | |
Line of Credit Facility Maximum Annual Capital Expenditure Ceiling | $3,600,000 |
Note_9_Income_Taxes_Details
Note 9 - Income Taxes (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Income Tax Expense (Benefit) | $1,551,693 | $251,600 | |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Extraordinary Items, Noncontrolling Interest | 4,385,636 | 728,439 | |
Unrecognized Tax Benefits | 100,000 | 100,000 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | $0 | $0 |
Note_10_Other_Liabilities_Deta
Note 10 - Other Liabilities (Details) (USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Feb. 28, 2015 |
Other Liabilities and Financial Instruments Subject to Mandatory Redemption [Abstract] | |
Gain on Waiver of Rights under Proposed Joint Venture | $1.50 |
Note_11_Basic_and_Diluted_Earn2
Note 11 - Basic and Diluted Earnings per Common Share (Details) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 11 - Basic and Diluted Earnings per Common Share (Details) [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 116,600 | |
Dutch Auction Member | ||
Note 11 - Basic and Diluted Earnings per Common Share (Details) [Line Items] | ||
Stock Repurchased and Retired During Period, Shares | 193,907 | |
Stock Repurchase [Member] | ||
Note 11 - Basic and Diluted Earnings per Common Share (Details) [Line Items] | ||
Stock Repurchased and Retired During Period, Shares | 214,089 | 6,092 |
Note_11_Basic_and_Diluted_Earn3
Note 11 - Basic and Diluted Earnings per Common Share (Details) - Summary of Basic and Diluted Earnings Per Common Share (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Summary of Basic and Diluted Earnings Per Common Share [Abstract] | ||
Net income for the period (in Dollars) | $2,833,943 | $476,839 |
Basic weighted average number of common shares outstanding | 11,142,628 | 11,028,559 |
Effect of outstanding stock options | 437,419 | 611,058 |
Diluted weighted average number of shares outstanding | 11,580,047 | 11,639,617 |
Basic earnings per common share (in Dollars per share) | $0.25 | $0.04 |
Diluted earnings per common share (in Dollars per share) | $0.24 | $0.04 |
Note_12_Segment_Reporting_Deta
Note 12 - Segment Reporting (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Note 12 - Segment Reporting (Details) [Line Items] | |
Number of Reportable Segments | 2 |
Ting Virginia, LLC [Member] | |
Note 12 - Segment Reporting (Details) [Line Items] | |
Business Acquisition, Percentage of Voting Interests Acquired | 70.00% |
Note_12_Segment_Reporting_Deta1
Note 12 - Segment Reporting (Details) - Information by Reportable Segments (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Condensed Income Statements, Captions [Line Items] | ||
Net Revenues | $40,467,833 | $34,402,394 |
Cost of Revenues | 26,821,374 | 24,316,639 |
Gross Profit before network expenses | 13,646,459 | 10,085,755 |
Network expenses | 1,425,662 | 1,326,618 |
Gross Profit | 12,220,797 | 8,759,137 |
Sales and marketing | 3,799,175 | 4,021,774 |
Technical operations and development | 1,114,195 | 1,089,898 |
General and administrative | 1,815,188 | 1,767,800 |
Depreciation of property and equipment | 59,262 | 56,304 |
Amortization of intangibles | 53,215 | 219,030 |
Impairment of indefinite life intangible assets | 12,493 | 250,688 |
Loss on currency forward contracts | 956,858 | 551,371 |
Income from operations | 4,410,411 | 802,272 |
Other income expenses, net | 24,775 | 73,833 |
Income before provision for income taxes | 4,385,636 | 728,439 |
Domain Name Services [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Net Revenues | 27,540,819 | 27,690,262 |
Cost of Revenues | 19,476,217 | 20,035,208 |
Gross Profit before network expenses | 8,064,602 | 7,655,054 |
Network Access Services [Member] | ||
Condensed Income Statements, Captions [Line Items] | ||
Net Revenues | 12,927,014 | 6,712,132 |
Cost of Revenues | 7,345,157 | 4,281,431 |
Gross Profit before network expenses | 5,581,857 | 2,430,701 |
Network expenses | $1,425,662 | $1,326,618 |
Note_12_Segment_Reporting_Deta2
Note 12 - Segment Reporting (Details) - Summary of the Company's Revenue Earned from Each Significant Revenue Stream (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Wholesale | ||
Operating revenues | $40,467,833 | $34,402,394 |
Domain Services [Member] | Domain Name Services [Member] | Wholesale [Member] | ||
Wholesale | ||
Operating revenues | 21,175,131 | 21,648,954 |
Value Added Services [Member] | Domain Name Services [Member] | Wholesale [Member] | ||
Wholesale | ||
Operating revenues | 2,241,998 | 2,603,605 |
Ting [Member] | Network Access Services [Member] | ||
Wholesale | ||
Operating revenues | 12,927,014 | 6,712,132 |
Domain Name Services [Member] | Wholesale [Member] | ||
Wholesale | ||
Operating revenues | 23,417,129 | 24,252,559 |
Domain Name Services [Member] | Retail [Member] | ||
Wholesale | ||
Operating revenues | 2,875,728 | 2,384,063 |
Domain Name Services [Member] | Portfolio [Member] | ||
Wholesale | ||
Operating revenues | 1,247,962 | 1,053,640 |
Domain Name Services [Member] | ||
Wholesale | ||
Operating revenues | 27,540,819 | 27,690,262 |
Network Access Services [Member] | ||
Wholesale | ||
Operating revenues | $12,927,014 | $6,712,132 |
Note_12_Segment_Reporting_Deta3
Note 12 - Segment Reporting (Details) - Summary of the Company's Cost of Revenues from Each Significant Revenue Stream (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Wholesale | ||
Cost of revenues | $28,247,036 | $25,643,257 |
Network Expenses: | ||
Network, other costs | 1,222,096 | 1,143,644 |
Network, depreciation and amortization costs | 3,924 | |
Total Network Expenses | 1,425,662 | 1,326,618 |
Domain Services [Member] | Domain Name Services [Member] | Wholesale [Member] | ||
Wholesale | ||
Cost of revenues | 17,548,027 | 18,235,215 |
Value Added Services [Member] | Domain Name Services [Member] | Wholesale [Member] | ||
Wholesale | ||
Cost of revenues | 536,132 | 540,722 |
Ting [Member] | Network Access Services [Member] | ||
Wholesale | ||
Cost of revenues | 7,345,157 | 4,281,431 |
Domain Name Services [Member] | Wholesale [Member] | ||
Wholesale | ||
Cost of revenues | 18,084,159 | 18,775,937 |
Domain Name Services [Member] | Retail [Member] | ||
Wholesale | ||
Cost of revenues | 1,220,500 | 1,015,416 |
Domain Name Services [Member] | Portfolio [Member] | ||
Wholesale | ||
Cost of revenues | 171,558 | 243,855 |
Domain Name Services [Member] | ||
Wholesale | ||
Cost of revenues | 19,476,217 | 20,035,208 |
Network Access Services [Member] | ||
Wholesale | ||
Cost of revenues | 28,247,036 | 25,643,257 |
Network Expenses: | ||
Network, other costs | 1,222,096 | 1,143,644 |
Network, depreciation and amortization costs | 203,566 | 182,974 |
Total Network Expenses | $1,425,662 | $1,326,618 |
Note_12_Segment_Reporting_Deta4
Note 12 - Segment Reporting (Details) - Summary of Company's Property and Equipment by Geographic Region (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Note 12 - Segment Reporting (Details) - Summary of Company's Property and Equipment by Geographic Region [Line Items] | ||
Property, plant and equipment | $5,346,070 | $1,609,787 |
CANADA | ||
Note 12 - Segment Reporting (Details) - Summary of Company's Property and Equipment by Geographic Region [Line Items] | ||
Property, plant and equipment | 1,122,910 | 1,131,883 |
UNITED STATES | ||
Note 12 - Segment Reporting (Details) - Summary of Company's Property and Equipment by Geographic Region [Line Items] | ||
Property, plant and equipment | 4,145,540 | 379,891 |
GERMANY | ||
Note 12 - Segment Reporting (Details) - Summary of Company's Property and Equipment by Geographic Region [Line Items] | ||
Property, plant and equipment | $77,620 | $98,013 |
Note_12_Segment_Reporting_Deta5
Note 12 - Segment Reporting (Details) - Summary of Company's Amortizable Intangible Assets by Geographic Region (USD $) | Mar. 31, 2015 | Mar. 31, 2014 |
Note 12 - Segment Reporting (Details) - Summary of Company's Amortizable Intangible Assets by Geographic Region [Line Items] | ||
Amortizable intangible assets | $1,438,591 | $735,730 |
UNITED STATES | ||
Note 12 - Segment Reporting (Details) - Summary of Company's Amortizable Intangible Assets by Geographic Region [Line Items] | ||
Amortizable intangible assets | 754,191 | |
GERMANY | ||
Note 12 - Segment Reporting (Details) - Summary of Company's Amortizable Intangible Assets by Geographic Region [Line Items] | ||
Amortizable intangible assets | $684,400 | $735,730 |
Note_12_Segment_Reporting_Deta6
Note 12 - Segment Reporting (Details) - Summary of Company's Deferred Tax Asset, Net of Valuation Allowance (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Note 12 - Segment Reporting (Details) - Summary of Company's Deferred Tax Asset, Net of Valuation Allowance [Line Items] | ||
Deferred tax assets | $8,107,573 | $7,378,619 |
CANADA | ||
Note 12 - Segment Reporting (Details) - Summary of Company's Deferred Tax Asset, Net of Valuation Allowance [Line Items] | ||
Deferred tax assets | $8,107,573 | $7,378,619 |
Note_12_Segment_Reporting_Deta7
Note 12 - Segment Reporting (Details) - Summary of Valuation and Qualifying Accounts (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Allowance for doubtful accounts, excluding provision for credit notes | ||
Balance at beginning of period | $125,766 | $91,226 |
Charged to (recovered) costs and expenses | 3,996 | -34,540 |
Balance at end period | $121,770 | $125,766 |
Note_14_Stockholders_Equity_De
Note 14 - Stockholders' Equity (Details) (USD $) | 3 Months Ended | 0 Months Ended | 3 Months Ended | ||||
Mar. 31, 2015 | Jan. 08, 2015 | Mar. 31, 2014 | Jan. 07, 2015 | Dec. 31, 2014 | Feb. 11, 2015 | Mar. 05, 2014 | |
Note 14 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Repurchased and Retired During Period, Value | $7,712,145 | ||||||
Common Stock, Shares, Issued (in Shares) | 10,996,733 | 11,135,825 | 11,329,732 | ||||
Common Stock, Shares, Outstanding (in Shares) | 10,996,733 | 11,135,825 | 11,329,732 | ||||
Dutch Auction Tender Offer [Member] | |||||||
Note 14 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Repurchased and Retired During Period, Shares (in Shares) | 193,907 | ||||||
Treasury Stock Acquired, Average Cost Per Share (in Dollars per share) | $18.50 | ||||||
Stock Repurchased and Retired During Period, Value | 3,587,280 | ||||||
Stock Repurchased Transaction Costs | 70,000 | ||||||
Stock Buyback Program 2015 [Member] | |||||||
Note 14 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Repurchased and Retired During Period, Shares (in Shares) | 214,089 | ||||||
Stock Repurchased and Retired During Period, Value | 4,055,056 | ||||||
Stock Repurchase Program, Authorized Amount | 20,000,000 | ||||||
Stock Buyback Program 2014 [Member] | |||||||
Note 14 - Stockholders' Equity (Details) [Line Items] | |||||||
Stock Repurchased and Retired During Period, Shares (in Shares) | 6,092 | ||||||
Stock Repurchased and Retired During Period, Value | 82,286 | ||||||
Stock Repurchase Program, Authorized Amount | $20,000,000 |
Note_14_Stockholders_Equity_De1
Note 14 - Stockholders' Equity (Details) - Stockholders' Equity Transactions (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 14 - Stockholders' Equity (Details) - Stockholders' Equity Transactions [Line Items] | ||
Balance | $35,642,393 | |
Exercise of stock options | 247,983 | |
Exercise of stock options (in Shares) | 74,997 | 291,913 |
Repurchase and retirement of shares | -7,712,145 | |
Stock-based compensation | 125,048 | |
Income tax effect related to stock options exercised | 412,642 | |
Net income for the period | 2,833,943 | 476,839 |
Unrealized loss on foreign currency forward contracts treated as hedges | -960,866 | |
Reclassification to net income due to settlement of foreign currency forward contracts treated as hedges | 416,074 | 227,511 |
Balance | 31,005,072 | |
Common Stock [Member] | ||
Note 14 - Stockholders' Equity (Details) - Stockholders' Equity Transactions [Line Items] | ||
Balance | 14,130,059 | |
Balance (in Shares) | 11,329,732 | |
Exercise of stock options | 360,949 | |
Exercise of stock options (in Shares) | 74,997 | |
Repurchase and retirement of shares | -516,003 | |
Repurchase and retirement of shares (in Shares) | -407,996 | |
Balance | 13,975,005 | |
Balance (in Shares) | 10,996,733 | |
Additional Paid-in Capital [Member] | ||
Note 14 - Stockholders' Equity (Details) - Stockholders' Equity Transactions [Line Items] | ||
Balance | 29,090,058 | |
Exercise of stock options | -112,966 | |
Repurchase and retirement of shares | -7,196,142 | |
Stock-based compensation | 125,048 | |
Income tax effect related to stock options exercised | 412,642 | |
Balance | 22,318,640 | |
Retained Earnings [Member] | ||
Note 14 - Stockholders' Equity (Details) - Stockholders' Equity Transactions [Line Items] | ||
Balance | -6,955,283 | |
Net income for the period | 2,833,943 | |
Balance | -4,121,340 | |
AOCI Attributable to Parent [Member] | ||
Note 14 - Stockholders' Equity (Details) - Stockholders' Equity Transactions [Line Items] | ||
Balance | -622,441 | |
Unrealized loss on foreign currency forward contracts treated as hedges | -960,866 | |
Reclassification to net income due to settlement of foreign currency forward contracts treated as hedges | 416,074 | |
Balance | ($1,167,233) |
Note_15_Sharebased_Payments_De
Note 15 - Share-based Payments (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Note 15 - Share-based Payments (Details) [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 146 days | |
Allocated Share-based Compensation Expense | $125,048 | $100,977 |
Employee Stock Option [Member] | ||
Note 15 - Share-based Payments (Details) [Line Items] | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $1,228,825 |
Note_15_Sharebased_Payments_De1
Note 15 - Share-based Payments (Details) - Stock Option Transactions (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Stock Option Transactions [Abstract] | ||
Outstanding, beginning of period | 976,062 | 1,407,639 |
Outstanding, beginning of period | $5.41 | $3.80 |
Granted | 45,000 | |
Granted | $19.41 | |
Exercised | -74,997 | -291,913 |
Exercised | $3.31 | $3.12 |
Forfeited | -2,742 | -5,594 |
Forfeited | $12.15 | $5.56 |
Expired | -2,875 | |
Expired | $3.40 | |
Outstanding, end of period | 943,323 | 1,107,257 |
Outstanding, end of period | $6.23 | $3.97 |
Options exercisable, end of period | 653,145 | 753,506 |
Options exercisable, end of period | $4.11 | $3.15 |
Note_15_Sharebased_Payments_De2
Note 15 - Share-based Payments (Details) - Summary of Exercise Prices, Weighted Average Remaining Contractual Life and Intrinsic Values of Outstanding Options (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Number Outstanding (in Shares) | 943,323 | 976,062 | 1,107,257 | 1,407,639 |
Weighted average exercise price per share ,options outstanding | $6.23 | $5.41 | $3.97 | $3.80 |
Weighted average remaining contractual life (years), options outstanding | 3 years 73 days | |||
Aggregate intrinsic value, options outstanding (in Dollars) | $12,067,946 | |||
Number exercisable (in Shares) | 653,145 | 753,506 | ||
Weighted average exercise price per share, options exercisable | $4.11 | $3.15 | ||
Aggregate intrinsic value, options exercisable (in Dollars) | 9,722,776 | |||
Exercise Price Range 01 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price - lower | $2.40 | |||
Exercise price - higher | $2.92 | |||
Number Outstanding (in Shares) | 467,410 | |||
Weighted average exercise price per share ,options outstanding | $2.73 | |||
Weighted average remaining contractual life (years), options outstanding | 1 year 328 days | |||
Aggregate intrinsic value, options outstanding (in Dollars) | 7,605,899 | |||
Number exercisable (in Shares) | 443,444 | |||
Weighted average exercise price per share, options exercisable | $2.72 | |||
Aggregate intrinsic value, options exercisable (in Dollars) | 7,220,526 | |||
Exercise Price Range 02 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price - lower | $3 | |||
Exercise price - higher | $5.76 | |||
Number Outstanding (in Shares) | 213,312 | |||
Weighted average exercise price per share ,options outstanding | $5.09 | |||
Weighted average remaining contractual life (years), options outstanding | 3 years 6 months | |||
Aggregate intrinsic value, options outstanding (in Dollars) | 2,967,841 | |||
Number exercisable (in Shares) | 139,685 | |||
Weighted average exercise price per share, options exercisable | $4.85 | |||
Aggregate intrinsic value, options exercisable (in Dollars) | 1,976,136 | |||
Exercise Price Range 03 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price - lower | $8.56 | |||
Exercise price - higher | $10.16 | |||
Number Outstanding (in Shares) | 119,126 | |||
Weighted average exercise price per share ,options outstanding | $9.12 | |||
Weighted average remaining contractual life (years), options outstanding | 5 years | |||
Aggregate intrinsic value, options outstanding (in Dollars) | 1,176,925 | |||
Number exercisable (in Shares) | 43,141 | |||
Weighted average exercise price per share, options exercisable | $9.06 | |||
Aggregate intrinsic value, options exercisable (in Dollars) | 428,645 | |||
Exercise Price Range 04 [Member] | ||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||||
Exercise price - lower | $14.67 | |||
Exercise price - higher | $19.41 | |||
Number Outstanding (in Shares) | 143,475 | |||
Weighted average exercise price per share ,options outstanding | $16.92 | |||
Weighted average remaining contractual life (years), options outstanding | 6 years | |||
Aggregate intrinsic value, options outstanding (in Dollars) | 317,281 | |||
Number exercisable (in Shares) | 26,875 | |||
Weighted average exercise price per share, options exercisable | $15.37 | |||
Aggregate intrinsic value, options exercisable (in Dollars) | $97,469 |
Note_16_Fair_Value_Measurement2
Note 16 - Fair Value Measurement (Details) - Summary of the Fair Values of the Company's Derivative Instrument Liabilities (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instrument liability | $2,139,268 | $1,115,805 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative instrument liability | $2,139,268 | $1,115,805 |