TUCOWS INC /PA/

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

1. Organization of the Company:

Tucows Inc. (referred to as the “Company”, “Tucows”, “we”, “us” or through similar expressions) is a corporate parent, allocating capital and providing efficient shared services to itsthree businesses: Ting, Wavelo and Tucows Domains Services. Ting provides retail consumers and small businesses with high-speed fixed Internet access in a number of towns and cities across the United States. Wavelo offers platform services which provide solutions to support Communication Service Providers ("CSPs") including subscription and billing management, network orchestration and provisioning, individual developer tools, and other professional services. Tucows Domains Services is a global distributor of Internet services, including domain name registration, digital certificates, and email. It provides these services primarily through a global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users.

2. Significant Accounting Policies:

The Consolidated Financial Statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and are stated in U.S. dollars, except where otherwise noted.

(a) Basis of presentation

These Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated on consolidation.

Subsidiary financial condition

The Company's subsidiary, Ting, has negative operating cash flows and continues to make net losses. The Company has commenced a process to review strategic alternatives for the Ting business, however, Ting* may**not* be able to meet its financial obligations over thetwelve months following the date of the issuance of the financial statements without additional financing. Ting operates as a bankruptcy-remote entity and its debt hasno recourse to the Company. Accordingly, the Company's direct financial exposure to Ting is limited to certain contractual guarantees as disclosed in “Note19. Commitments and Contingencies”. The Company doesnot believe that Ting's financial condition gives rise to substantial doubt about the Company's ability to continue as a going concern.

Change in presentation of Consolidated Financial Statements

Effective as of the Form10-Q for the quarter ended* March 31, 2025,filed on May 8, 2025,*the Company has updated the format of its Consolidated Financial Statements. This revision condenses certain previously displayed line items to streamline presentation and improve clarity for the users of the financial statements.

F-9

Change in presentation of Consolidated Balance Sheet

1. “Inventory”, “Income taxes receivable”, "Other assets" and "Assets held for sale" within the line item “Prepaid expenses and other”

2. “Investments” and “Contract costs” and Contract asset - long term" within the line item “Other assets”

3. “Accounts payable” and “Accrued liabilities” within the line item “Accounts payable and accrued liabilities”

4. “Customer deposits”, “Accreditation fees payable” and “Income taxes payable” within the line item “Other current liabilities”

These line items are adjusted on the Company’s Consolidated Balance Sheets to conform to the current period presentation. The Company continues to present the line item information in “Note22. Additional Financial Information”.

Change in presentation of Consolidated Statements of Operations and Comprehensive Income (Loss)

1. “Network, depreciation of property and equipment” and “Network, amortization of intangible assets” within the line item “Network, depreciation and amortization”

2. “Depreciation of property and equipment” and “Amortization of intangible assets” within the line item “Depreciation and amortization”

3. “Income earned on sale of transferred assets, net” within the line item “Other income (expense)”

These line items are adjusted on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) to conform to the current period presentation. In addition, the Company provides additional disclosures related to “Income earned on sale of transferred assets, net” in “Note17. Other income (Expenses)”

Change in presentation of Consolidated Statements of Cash flows

1. “Net amortization contract costs”, “Net Right of use operating assets/Operating lease liability”, “Disposal of domain names”, “Undistributed earnings of equity method investee”, “Contract assets”, “Inventory”, “Income taxes recoverable”, “Customer deposits” and “Accreditation fees payable” within the line item “Other operating assets and liabilities”

These line items are adjusted on the Company’s Consolidated Statements of Cash flows to conform to the current period presentation.

These presentational changes donot impact previously reported financial results and are intended to improve readability and align with industry best practices.

Comparative periods have been revised to conform to the current period’s presentation where applicable.

(b) Use of estimates

The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. These estimates and assumptions are based on historical experience, available market information as applicable,third party analysis and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Under different assumptions or conditions, the actual results will differ, potentially materially, from those previously estimated. Many of the conditions impacting these assumptions and estimates are outside of the Company’s control.

Significant areas requiring use of estimates include, among others, the recoverability of property and equipment and other long-lived assets, goodwill and intangible assets, fair value measurements, revenue recognition, lease liabilities and right of use assets, income taxes, and contingencies.

(c) Cash and cash equivalents

All highly liquid investments, with an original term to maturity ofthree months or less are classified as cash and cash equivalents. This classification also extends to amounts in transit from payment providers and other clearing accounts. These in-transit balances have been initiated and collected from customers prior to the reporting date and are expected to settle shortly after the reporting date. Cash and cash equivalents are stated at cost which approximates market value.

(d) Restricted cash

Restricted cash is solely in connection with the2023 Term Notes and2024 Term Notes as defined in"Note8. Notes Payable" and consists of (i) cash receipts held by trustee related to securitized assets and (ii) liquidity reserve funds. The non-current portion of the restricted cash is presented in "Secured notes reserve funds" on the Consolidated Balance Sheet.

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(e) Inventory

Inventory primarily consists of Internet optical network terminals and customer installation equipment. All inventory is stated at the lower of cost or net realizable value, with cost being determined on a weighted average cost basis.

Inventory is analyzed for signs of obsolescence or damage on a regular basis. If assessments regarding the above factors adversely change, we* may*be required to write down the value of inventory.

(f) Property and equipment

Property and equipment are stated at cost, net of accumulated depreciation and impairment. Assets deemed to have been abandoned are recorded at their salvage value and arenot depreciated. 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:

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* maynot* be recoverable. Where such indicators exist, the Company performs impairment testing at the asset group level unless an asset generates independent cash flows. The Companyfirst performs a qualitative assessment to determine whether events or circumstances indicate that that the carrying amount of the asset (group)* maynot* be recoverable. The Company compares the carrying amount of the asset (group) to the undiscounted cash flows expected to be generated over its remaining useful life. If the carrying value exceeds the undiscounted future cash flows, the relevant asset (group) is considered to be impaired, and an impairment loss is recognized in the amount by which the carrying value of the asset (group) exceeds fair value.

For certain assets that the Company determined would be disposed of by abandonment, management estimates the salvage value. The salvage value is estimated based on management’s judgment regarding realizability in secondary markets. Management bases its estimates on historical experience, available market information as applicable,third party analysis and on various other assumptions that are believed to be reasonable under the circumstances at the time they are made. Management regularly reviews its estimates of salvage values based on current market information and data, and recognizes additional impairment where salvage values decrease.

The determination of salvage value of the materials and supplies held for capital projects involves significant estimates, and it is reasonably possible that salvage value could materially change in the near term due to changing market conditions, market demand and subsequent asset sales.

In instances where assets are found to be damaged and haveno salvage value, they are fully impaired.

Additions to the fiber network are recorded at cost, including all material, labor, capitalized interest, vehicle and installation and construction 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 andnot on a specific asset basis. For assets that are retired, the estimated historical cost and related accumulated depreciation is derecognized.

Additions to land are recorded at cost, and include any direct costs associated with the purchase, as well as any direct costs incurred to bring it to the condition necessary for its intended use, such as legal fees associated with the acquisition and the cost of permanent improvements. Land isnot depreciated.

F-11

We capitalize the development costs for software to be used internally when software development projects enter the application development stage. This occurs when we complete the preliminary project stage, management authorizes and commits to funding the project, and it is feasible that the project will be completed and the software will perform the intended function. We cease to capitalize costs related to a software project when it enters the post implementation and operation stage, which is the point at which a software project is substantially completed and ready for its intended use.

Costs capitalized during the application development stage consist of payroll and related costs for employees who are directly associated with, and who devote time directly to, a project to develop software for internal use. External contractor costs who are directly associated with, and who devote time directly to, a project to develop software for internal use are also capitalized. We donot capitalize any general and administrative or overhead costs or costs incurred during the application development stage related to research and development, training or data conversion costs. Research and development costs and data conversion costs* maybe recorded as Costs to fulfill a contract, if they relate to a specific professional services customer contract (see "Note11.* Costs to obtain and fulfill a contract"). Costs related to upgrades and enhancements to internal-use software, if those upgrades and enhancements result in additional functionality, are capitalized. If upgrades and enhancements donot result in additional functionality, those costs are expensed as incurred.

In determining and reassessing the estimated useful life over which the cost incurred for the software should be amortized, we consider the effects of obsolescence, technology, competition and other economic factors.

(g) Derivative Financial Instruments

The Company uses derivative financial instruments to manage foreign currency exchange risk.

The Company accounts for these instruments in accordance with ASC815 Derivatives and Hedging ("ASC815"), 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. ASC815 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). The Company 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 (loss) in our accompanying Consolidated Balance Sheets.

F-12

The fair value of the forward exchange contracts is 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, asno quoted market prices exist for the derivative instruments. The discounted cash flow techniques use observable market inputs, such as foreign currency spot rate, Secured Overnight Financing Rate (SOFR), forward currency and interest rates.

(h) Goodwill and Other Intangible assets

Goodwill

Goodwill represents the excess of purchase price over the fair values assigned to the net assets acquired in business combinations. The Company doesnot amortize goodwill. Impairment testing for goodwill is performed annually in thefourth quarter of each year or more frequently if impairment indicators are present. Impairment testing is performed at the operating segment level, which the Company has assessed to be our reporting units. The Company has determined that it hasthree operating segments, Ting, Wavelo and Tucows Domains.

The Company performs a qualitative assessment to determine whether there are events or circumstances which would lead to a determination that it is more-likely-than-not that goodwill has been impaired. If, after this qualitative assessment, the Company determines that it isnot more-likely-than-not that goodwill has been impaired, thenno quantitative testing is necessary. In performance of the qualitative test, consideration is given to factors such as macro-economic, industry and market conditions including the capital markets, the competitive environment, in addition to other internal factors including changes to our market capitalization, cash flows, obligations and access to capital of our segments. In the event that the qualitative tests indicate that there* may*be impairment, quantitative impairment testing is required.

If required to perform the quantitative test, the Company compares the reporting unit's carrying amount to its fair value, which is typically estimated using an income approach in which future expected cash flows at the operating segment level are converted to present value using factors that consider the timing and risk of the future cash flows. The estimate of cash flows used is prepared on an unleveraged debt-free basis. The discount rate reflects a market-derived weighted average cost of capital. The Company believes that this approach is appropriate because it provides a fair value estimate based upon the expected long-term operating and cash flow performance for its operating segment. The projections are based upon the Company’s best estimates of projected economic and market conditions over the related period including growth rates, estimates of future expected changes in operating margins and cash expenditures.

Other significant estimates and assumptions include terminal value growth rates, terminal value margin rates, future capital expenditures and changes in future working capital. If assumptions and estimates used to assess impairment prove to be inaccurate, future asset impairment charges could be required.

Intangibles AssetsNot Subject to Amortization

Intangible assetsnot subject to amortization consist of surname domain names and direct navigation domain names. While the domain names are renewed annually, through payment of a renewal fee to the applicable registry, the Company has the exclusive right to renew these names at its option. Renewals occur routinely and at a nominal cost. Moreover, the Company has determined that there are currentlyno legal, regulatory, contractual, economic or other factors that limit the useful life of these domain names on an aggregate basis and accordingly treat the portfolio of domain names as indefinite life intangible assets. The Company re-evaluates the useful life determination for domain names in the portfolio each year to determine whether events and circumstances continue to support an indefinite useful life.

The indefinite life intangible assets arenot amortized, but are subject to an annual impairment assessment, during which the Company evaluates whether changes in circumstances indicate potential impairment. Additionally, the Company reviews individual domain names in the portfolio for potential impairment throughout the fiscal year in determining whether a particular name should be renewed. Impairment is recognized for names that arenot renewed.

F-13

Intangible Assets Subject to Amortization

Intangible assets subject to amortization consist of brand, customer relationships, technology and network rights and are amortized on a straight-line basis over their estimated useful lives as follows:

The Company continually evaluates whether events or circumstances have occurred that indicate the remaining estimated useful lives of its intangible assets subject to amortization* maywarrant revision or that the remaining balance of such assets may**not* be recoverable. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the asset in measuring whether the asset is recoverable.* *

(i) Revenue recognition

See “Note10. Revenue” for a description of the Company’s revenue recognition policy and a further description of the principal activities – disaggregated by reportable segments – from which the Company generates its revenue.

(j) Contract balances

The Company accounts for contract assets and liabilities on a contract-by-contract basis, with each contract presented as either a net contract asset or a net contract liability accordingly. Contract assets are recorded for services delivered under contracts, to the extent that the services delivered exceed the services which have been billed to the customer at the reporting date. Contract assets are transferred to receivables when the rights to consideration become unconditional. Contract assets primarily relate to long-term mobile platform services contracts. Contract liabilities primarily relate to the unearned portion of revenues received in advance related to the unexpired term of registration fees from domain name registrations and other domain related Internet services, on both a wholesale and retail basis. To a lesser extent, contract liabilities also include the unearned portion of construction services in the Ting segment received in advance of performance of the services, and a portion of the transaction price received from other professional services.

(k) Contract Costs

See “Note11. Costs to obtain and fulfill a contract” for a description of the Company’s contract cost recognition policy.

(l) Contract Modifications

Contracts* maybe amended to account for changes in contract specifications and requirements. Contract modifications exist when the amendment either creates new, or changes existing, enforceable rights and obligations. When contract modifications create new performance obligations and the increase in consideration approximates the standalone selling price for services related to such new performance obligations as adjusted for specific facts and circumstances of the contract, the modification is considered to be a separate contract. If a contract modification isnot* accounted for as a separate contract, the Company accounts for the promised servicesnot yet transferred at the date of the contract modification (the remaining promised services) prospectively, as if it were a termination of the existing contract and the creation of a new contract, if the remaining services are distinct from the services transferred on or before the date of the contract modification. The Company accounts for a contract modification as if it were a part of the existing contract if the remaining services arenot distinct and, therefore, form part of a single performance obligation that is partially satisfied at the date of the contract modification. In such case the effect that the contract modification has on the transaction price, and on the entity’s measure of progress toward complete satisfaction of the performance obligation, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) at the date of the contract modification (the adjustment to revenue is made on a cumulative catch-up basis).

F-14

(m) Leases

Under ASC842, we determine if an arrangement is a lease at inception. Our lease agreements generally contain lease and non-lease components. Payments under our lease arrangements are primarily fixed. Non-lease components primarily include payments for maintenance and utilities. We combine fixed payments for non-lease components with lease payments and account for them together as a single lease component which increases the amount of our right of use assets and lease liabilities.

Certain lease agreements contain variable payments, which are expensed as incurred andnot included in the right of use assets and lease liabilities. These payments include amounts contingent on the number of Ting internet subscribers connected to a leased fiber network, and payments for maintenance, utilities and property taxes.

We have elected to consider leases with a term of12 months or less as short-term, and as such these havenot been recognized on the balance sheet. We recognize lease expense for short-term leases on a straight-line basis over the lease term.

Right of use assets and lease liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in our leases isnot readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. Our lease terms include periods under options to extend the lease when it is reasonably certain that we will exercise that option, and periods covered by options terminate the lease if we are reasonably certainnot to exercise that option. The lease term used in determining our right of use assets and lease liabilities is generally the non-cancelable period of the lease excluding any periods covered by an option to extend the lease or terminate the lease.

Operating lease expense is recognized on a straight-line basis over the lease term.

(n) Translation of foreign currency transactions

The Company's functional currency is the U.S. dollar. Monetary assets and liabilities of the Company and of its wholly owned subsidiaries that are denominated in foreign currencies are translated into United States dollars at the exchange rates prevailing at the balance sheet dates. Non-monetary assets and liabilities are translated at the historical exchange rates. Transactions included in operations are translated at the rate at the date of the transactions.

(o) Income taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in net income in the year that includes the enactment date. A valuation allowance is recorded if it isnot likely that a deferred tax asset will be realized.

The Company recognizes the impact of an uncertain income tax position at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority and includes consideration of interest and penalties. An uncertain income tax position willnot be recognized if it has less than a50% likelihood of being sustained. The liability for unrecognized tax benefits is classified as non-current unless the liability is expected to be settled in cash within12 months of the reporting date.

(p) Redeemable preferred units

See "Note13. Redeemable preferred units" for the description and treatment of the Company's Series A Preferred Unit Purchase Agreement.

(q) Stock-based compensation

Stock-based compensation expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest, we have elected to account for forfeitures when they occur. The Company recognizes stock-based compensation for both public company stock and private subsidiary stock - see "Note15. Stock Option Plans."

F-15

(r) Earnings per common share

Basic earnings per common share has been calculated on the basis of net income for the year divided by the weighted average number of common shares outstanding during each year. Diluted earnings per share gives effect to all dilutive potential common shares outstanding at the end of the year assuming that they had been issued, converted or exercised at the later of the beginning of the year or their date of issuance. In computing diluted earnings per share, the treasury stock method is used to determine the number of shares assumed to be purchased from the conversion of common share equivalents or the proceeds of the exercise of options. When there is a net loss from operations, the Company considers all options anti-dilutive for the purposes of calculating a diluted earnings per share.

(s) Concentration of credit risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash equivalents, restricted cash, accounts receivable and forward foreign exchange contracts. Cash equivalents consist of deposits with major commercial banks, the maturities of which arethree months or less from the date of purchase. With respect to accounts receivable, the Company performs periodic credit evaluations of the financial condition of its customers and typically doesnot require collateral from them. The counterparty to any forward foreign exchange contracts is a major commercial bank which management believes doesnot represent a significant credit risk. Management assesses the need for allowances for potential credit losses by considering the credit risk of specific customers, historical trends and other information.

(t) Fair value measurement

Fair value of financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Thethree-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Level1—Quoted prices in active markets for identical assets or liabilities

Level2—Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level3—No observable pricing inputs in the market

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment, and* may*affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The fair value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accreditation fees payable, customer deposits, accrued liabilities, syndicated revolver, notes payable and redeemable preferred units (Level2 measurements) approximate their carrying values due to the relatively short periods to maturity of the instruments.

F-16

The fair value of the derivative financial instruments is determined using an estimated credit-adjusted mark-to-market valuation (a Level2 measurement) which takes into consideration the Company and the counterparty credit risk.

(u) Investments

The Company accounts for investments in entities over which it has the ability to exert significant influence, but doesnot control and isnot the primary beneficiary of, using the equity method of accounting. The Company includes the proportionate share of earnings (loss) of the equity method investees in Other Income in the Consolidated Statements of Comprehensive Income (Loss). The proportional shares of affiliate earnings or losses accounted for under the equity method of accounting werenot material for all periods presented. Equity investments in which the Company doesnot have significant influence are accounted for under ASC321 - Accounting for Equity Interests. These investments are recorded in Investments on the Consolidated Balance Sheets, please see "Note22. Additional Financial Information". If the fair value of these investments is readily determinable, they are measured at fair value, with changes recognized in Other Income (Expense), net. If the fair value isnot readily determinable, the Company applies the measurement alternative, recording investment at cost, less any impairment, and adjusting for subsequent observable price changes when an observable transaction occurs. These adjustments are recorded in Other Income (Expense). The Company has determined that the fair value of its equity investments isnot readily determinable and, therefore, applies the measurement alternative, recording investments at cost, less any impairment, and adjusting for observable price changes when applicable.

Ting Memphis Co is a limited partnership established to support the marketing and local presence of the Company’s internet and mobile services in Memphis, Tennessee, in which the Company holds a general partnership interest. To simplify the presentation of our Consolidated Financial Statements, we have fully consolidated Ting Memphis Co as the non-controlling interest is considered immaterial. As a result,no separate presentation or disclosure of non-controlling interest has been made in the financial statements.

(v) Segment reporting

The Company is organized and managed based onthree operating segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate.No operating segments have been aggregated to determine our reportable segments.

Our reportable operating segments and their principal activities consist of the following:

Our segmented results include shared services allocations to the operating segments, including a profit margin, for Finance, Human Resources and other technical services. In addition, Wavelo charges Ting a subscriber based monthly charge service rendered. Financial impacts from these allocations and cross segment charges are eliminated as part of the consolidation.

The Company’s assets are primarily located in Canada, the United States and Europe.

(w) Government Grants

The Company was the beneficiary of government grants from the City of Greenwood Village, Colorado, to support the construction of a fiber-to-the-premises (FTTP) network. The grant was intended to subsidize network construction, with the goal of providing broadband internet access service (BIAS) to all serviceable addresses within the city. The government grant was accounted for as a reduction of the cost basis of property and equipment in the Company's Consolidated Balance Sheet. Depreciation was calculated based on the reduced cost of the asset over its estimated useful life. In thesecond quarter of2025, the Greenwood Village network was subsequently disposed of in connection with the sale of certain property and equipment and intangible assets.

F-17

The Company was awarded a grant under the Growing Rural Economies with Access to Technology (“GREAT”) program administered by the North Carolina Department of Information Technology to support broadband deployment in Lee County, North Carolina. The grant provides reimbursement for qualifying construction costs incurred in connection with making broadband services available to designated locations within the awarded project area. Grant reimbursements are accounted for as a reduction of the cost basis of the related property and equipment. As of* December 31, 2025,*the Company had received reimbursements under the GREAT grant program, which were recorded as reductions to property and equipment in the Consolidated Balance Sheets.

(x) Recent Accounting Pronouncements

Recent Accounting Pronouncements Adopted

In* December 2023,the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2023-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures*. The ASU enhances the transparency and decision usefulness of income tax disclosures by requiring, among other things, additional disaggregation within the effective tax rate reconciliation and disclosure of income taxes paid by jurisdiction.

The Company adopted this ASU effective* January 1, 2025.The adoption of this guidance impacted the Company’s income tax disclosures but didnot* have a material impact on the Company’s consolidated financial position, results of operations, or cash flows.

Recent Accounting PronouncementsNot* Yet Adopted*

In* November 2024,the FASB issued ASUNo.* 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic220-40): Disaggregation of Income Statement Expenses” (ASU2024-03), which requires that a public entity disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption presented on the face of the income statement. The standard also requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that arenot separately disaggregated quantitatively as well as disclose the total amount of selling expenses and, annually, the entity’s definition of selling expenses. ASU2024-03 will be effective for annual periods beginning after* December 15, 2026,*with either retrospective or prospective application. The standard allows for early adoption of these requirements; we are currently evaluating the disclosure impacts of our adoption.

In* September 2025,FASB issued ASU2025‑06* “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The amendments update the accounting model for internal-use software by eliminating the prescriptive “development stage” framework and replacing it with a “probable-to-complete” threshold and a “significant development uncertainty” evaluation. The amendments also remove separate guidance for website development costs and require entities to apply the property, plant, and equipment disclosure requirements in Subtopic360-10 to capitalized internal-use software. The amendments are effective for annual periods beginning after* December 15, 2027,*and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its Consolidated Financial Statements and related disclosures.

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3. Property and Equipment:

Property and equipment consist of the following (Dollar amounts in thousands of U.S. dollars):

(1) Fiber network is presented net of $0.1 million government grants (2024: $1.6 million), with an impact of $0.1 million on accumulated depreciation (2024: $0.1 million).

Depreciation of property and equipment (Dollar amounts in thousands of U.S. dollars):

Impairment of Property and Equipment

During the year ended* December 31, 2025,*the Company recognized a total impairment expense of $11.5 million, related to abandoned materials and supplies held for capital projects and right-of-use ("ROU") assets. For financial statement presentation purposes, depending on the nature and stage of deployment, materials and supplies held for capital projects is included within "Assets under construction," and "Computer equipment" in the Consolidated Financial Statements.

2025 Impairment Charges

In thethird quarter of2025, management completed a review of remaining construction assets following the implementation of the2024 Capital Efficiency Plan (as discussed and defined in "Note21. Restructuring Costs") as well as the disposal of certain assets under construction in thesecond andthird quarters of Fiscal2025. As part of this review, certain assets were determined tono longer be usable or recoverable in ongoing operations or future network builds. Management concluded that these assets met the definition of ‘assets disposed of by abandonment’ under ASC360-10 -Impairment and Disposal of Long-Lived Assets ("ASC360*-10*").

F-19

Management also reassessed its estimated salvage values of the abandoned materials and supplies held for capital projects in2024, based on current market conditions and updated expected recoveries. This reassessment resulted in a reduction in estimated recoverable amounts, and a corresponding write-down was recorded to reflect the updated estimates.

In total, assets with a carrying value of $14.9 million were impaired, with an estimated salvage value of $4.9 million, resulting in a recorded impairment charge of $10.0 million during the year ended* December 31, 2025.These assets consisted of materials and supplies held for capital projects that wereno* longer intended for deployment in the Company’s fiber network expansion. Additionally an impairment loss of $0.7 million was recognized related to ROU assets which is discussed under the "Note12. Leases."

The remaining $0.8 million of impairment charges relate to specific network assets that were identified through routine inspections as being damaged andno longer in use and are recorded under “Network, other costs” in the Consolidated Statements of Comprehensive Income (Loss).

2024 Impairment Charges

During the year ended* December 31, 2024,as part of the2024* Capital Efficiency plan, management conducted a review of Assets under construction, Computer equipment, Fiber network and Customer and equipment installation to determine if there were specific assets that wouldno longer contribute to future operations.

This review resulted in the identification of assets within Assets under construction and Computer equipment that areno longer intended for deployment in the Company's fiber network expansion. These assets relate to specific work zones under construction, related capitalized design costs, and materials held for construction (“the impaired construction assets”). Prior to the2024 Capital Efficiency Plan, the impaired construction assets were planned for future deployment in the operations of the Company's Ting reportable segment.

The impaired construction assets were deemed to be abandoned in accordance with ASC360-10 and recorded at their salvage value, and the impairment charge was recognized immediately. In total, $33.6 million in assets were impaired, with an estimated salvage value of $15.9 million, resulting in a recorded impairment charge of $17.7 million. This charge is recorded under “Impairment of property and equipment” in the Consolidated Statements of Comprehensive Income (Loss).

The remaining $1.4 million impairment charges relate to specific network assets that were identified through routine inspections as being damaged andno longer in use and are recorded under “Network, other costs” in the Consolidated Statements of Comprehensive Income (Loss).

2023 Impairment Charges

During the year ended* December 31, 2023,property and equipment with a net book value of $4.8 million were written off and included in "Network, other costs" in the Consolidated Statement of Comprehensive Income (Loss). The impairment losses incurred in2023* related to specific network assets that were identified as being damaged andno longer in use. The full cost of the identified assets was recorded as an impairment loss.

Asset Dispositions

During the year ended* December 31, 2025,*the Company sold property and equipment and intangibles for gross proceeds of $20.8 million, comprising cash proceeds and a $1.0 million indemnification holdback. The net book value of the assets at the time of the sales was $15.0 million, resulting in a gain of $5.9 million, which is included in "Gain on disposition of property and equipment" in the Consolidated Statements of Operations and Comprehensive Income (Loss).

F-20

4. Goodwill and Other Intangible Assets:

Goodwill

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

Goodwill consists of the following (Dollar amounts in thousands of U.S. dollars):

The Company's Goodwill balance is $130.4 million as of* December 31, 2025* and* December 31, 2024*. The Company's goodwill relates 83% ($107.7 million) to its Tucows Domains operating segment and 17% ($22.7 million) to its Ting operating segment.

Goodwill isnot amortized, but is subject to an annual impairment test. The Company performed an impairment analysis as outlined in “Note2(h). Significant Accounting Policies.” For the year ended* December 31, 2025 ("Fiscal2025*") and the year ended* December 31, 2024 ("Fiscal2024*"), the Company performed a qualitative assessment to determine whether events or changes in circumstances indicated that it was more likely thannot that the fair value of any reporting unit was less than its carrying amount. Based on this assessment, for the year ended* December 31, 2025,the Company identified indicators of potential impairment and therefore performed a quantitative impairment test in the Ting operating segment (reporting unit). The Company determined that the estimated fair value of the reporting unit exceeded its carrying value, and accordingly, no goodwill impairment charge was recorded for Fiscal2025.*

Other Intangible Assets

Intangible assets consist of acquired brand, technology, customer relationships, surname domain names, direct navigation domain names and network rights. The Company considers its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets arenot amortized, but are subject to an annual impairment assessment, during which the Company evaluates whether changes in circumstances indicate potential impairment. Additionally, throughout the year, management assessed specific domain names acquired through the acquisition of Mailbank.com Inc. in* June 2006,that were due for renewal, and decided to renew. During the years ended December 31, 2025*,* December 31, 2024*, and* December 31, 2023*, no impairment of indefinite life intangible assets was recorded.

Finite-life intangible assets, comprising brand, technology, customer relationships and network rights are being amortized on a straight-line basis over periods oftwo tofifteen years. The weighted average amortization period for all finite-life intangible assets is 5.4 years.

Throughout2025, the Company purchased $0.2 million in customer relationship assets through hosting agreements whereby customer assets and domain names were obtained. These customer assets are being amortized over seven years.

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Acquired intangible assets consist of the following (Dollar amounts in thousands of U.S. dollars):

The following table shows the estimated amortization expense for each of the next5 years and thereafter, assumingno further additions to acquired intangible assets are made (Dollar amounts in thousands of U.S. dollars):

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5. Fair Value Measurement:

For financial assets and liabilities recorded in our financial statements at fair value we utilize a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs intothree broad levels. Level1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level2 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. Level3 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.

Equity investments without readily determinable fair value include ownership rights that donot provide the Company with control or significant influence. Such equity investments are recorded at cost, less any impairment, and adjusted for subsequent observable price changes as of the date that an observable transaction takes place. Subsequent adjustments are recorded in other income (expense), net.

The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as of* December 31, 2025* (Dollar amounts in thousands of U.S. dollars):

The following table provides a summary of the fair values of the Company’s derivative instruments measured at fair value on a recurring basis as of* December 31, 2024* (Dollar amounts in thousands of U.S. dollars):

6. Derivative Instruments and Hedging Activities:

The Company is exposed to certain risks relating to its ongoing business operations. The primary risks managed by using derivative instruments are foreign exchange rate risk and interest rate risk.

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Since* October 2012,the Company has employed a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on its future cash flows related to a portion of payroll, taxes, rent and payments to Canadian domain name registry suppliers that are denominated in Canadian dollars and are expected to be paid by its Canadian operating subsidiary. In May 2020,the Company entered into a pay-fixed, receive-variable interest rate swap with a Canadian chartered bank to limit the potential interest rate fluctuations incurred on its future cash flows related to variable interest payments on the Second Amended2019* Credit Facility. The notional value of the interest rate swap was $70 million. During thethird quarter of fiscal year2022, the Company elected to discontinue its application of hedge accounting to its interest rate swaps prospectively. Until the interest rate swaps matured in* June 2023,the derivatives continued to be carried at fair value in the accompanying Consolidated Balance Sheets with changes in their fair value from the date of discontinuance recognized in current period earnings in Interest expense, net in the Consolidated Statements of Operations and Comprehensive Income (Loss). Unrealized gains and losses in Accumulated other comprehensive income ("AOCI") as of the date of discontinuance were realized in net income over the remaining term of the underlying forecasted interest payments into interest expense over the original term of the hedged debt. Prior to the discontinuance, for the interest rate swap contracts, unrealized gains or losses on the effective portion of these contracts had been included in other comprehensive income (OCI) and reclassified to earnings when the hedged transaction settled. As of December 31, 2025,there areno* interest swaps held by the Company.

The Company doesnot use hedging forward contracts for trading or speculative purposes. The foreign exchange contracts typically mature betweenone andtwelve months, and the interest rate swap fully matured as of* June 30, 2023.*

The Company has designated its foreign exchange contracts as hedging instruments in cash flow hedges of forecast transactions. Where the critical terms of the hedging instrument and the entire hedged forecasted transaction are the same, in accordance with Topic815, the Company concludes that changes in fair value and cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. The Company designated the foreign exchange hedge as a cash flow hedge of expected future payments at the inception of the contract. Accordingly, for the foreign exchange contracts, unrealized gains or losses on the effective portion of these contracts were included within other comprehensive income (loss) and reclassified to earnings when the hedged transaction is settled. Cash flows from hedging activities were classified under the same category as the cash flows from the hedged items in the Consolidated Statements of Cash Flows. The fair value of the contracts, as of* December 31, 2025* and* December 31, 2024*, is recorded as derivative instrument assets or liabilities. Where hedged transactions areno longer probable to occur, the loss on the associated forward contract would be recognized in earnings.

As of* December 31, 2025*, the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $27.2 million, of which $27.2 million met the requirements of ASC815 and were designated as hedges.

As of* December 31, 2024* the notional amount of forward contracts that the Company held to sell U.S. dollars in exchange for Canadian dollars was $29.4 million, of which $29.4 million met the requirements of ASC815 and were designated as hedges.

As of* December 31, 2025*, we had the following outstanding forward contracts to trade U.S. dollars in exchange for Canadian dollars:

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 years ended* December 31, 2025* and2024, were as follows (amounts presented donot include any income tax effects).

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Fair value of derivative instruments in the consolidated balance sheets (see“Note5. Fair Value Measurement”)

Movement in AOCI balance for the year ended December 31, 2025* (Dollar amounts in thousands of U.S. dollars)*

Movement in AOCI balance for the year ended December 31, 2024* (Dollar amounts in thousands of U.S. dollars)*

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Movement in AOCI balance for the year ended December 31, 2023* (Dollar amounts in thousands of U.S. dollars)*

Effects of derivative instruments on income and other comprehensive income (OCI) (Dollar amounts in thousands of U.S. dollars)

7. Syndicated Revolver:

2023 Credit Facility

On* September 22, 2023,the Company and its wholly owned subsidiaries, Tucows.com Co., Ting Inc., Tucows (Delaware) Inc., Wavelo, Inc. and Tucows (Emerald), LLC (each, a “Borrower” and together, the “Borrowers”) and certain other subsidiaries of the Company, as guarantors, entered into a Credit Agreement (the“2023* Credit Agreement”) with Bank of Montreal, as administrative agent (“BMO” or the “Agent”), and the lenders party thereto (the “Lenders”), to, among other things, provide the Borrowers with a revolving credit facility in an aggregate amountnot to exceed $240 million (the*“2023* Credit Facility”). The Borrowers* mayrequest an increase to the Credit Facility through new commitments of up to $60 million if the Total Funded Debt to Adjusted EBITDA Ratio (as defined in the2023* Credit Agreement) is less than 3.75:1.00. In connection with the2023 Credit Facility, the Company incurred $0.9 million of fees paid to the Lenders and $0.3 million of legal fees related to the debt issuance. These fees have been reflected as a reduction to the carrying amount of the loan payable and will be amortized over the term of the2023 Credit Agreement.

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On* September 8, 2025,the Borrowers entered into aone-year Extension Agreement (the “Extension Agreement”). The Extension Agreement extends the term of the2023* Credit Agreement through* September 22, 2027.The material terms of the2023* Credit Agreement remain unchanged; however, the Extension Agreement amends certain definitions relating to the treatment of specified expenses in the calculation of Adjusted EBITDA for purposes of the Total Funded Debt to Adjusted EBITDA Ratio financial covenant. In connection with the Extension Agreement, the Company incurred $0.4 million of fees paid to the Lenders. These fees have been reflected as reduction to the carrying amount of the loan payable and will be amortized over the extended term from* September 2026to September 2027.*

During thetwelve months ended* December 31, 2025,the Company made repayments of $5.0 million on the2023* Credit Facility. During the year ended* December 31, 2024,the Company made net cash repayments of $16.5 million. During the year ended December 31, 2023,the Company made net cash repayments of $17.8 million and $10.0 million under the2019* Credit Facility and the2023 Credit Facility, respectively.

Third Amended2019* Credit Facility*

In connection with entering into the2023 Credit Facility, on* September 22, 2023,the Company paid off the principal balance, including accrued interest thereon, of the revolving loans outstanding under the Third Amended and Restated Credit Agreement (the “RBC Credit Agreement”), dated as of August 8, 2022,as amended, by and among the Company, certain subsidiaries of the Company as borrowers, certain other subsidiaries of the Company as guarantors, Royal Bank of Canada, as administrative agent (“RBC”), and the lenders party thereto, pursuant to which Tucows’ prior credit facility that provided the Borrowers with a $240 million revolving credit facility (the"2019* Credit Facility"). The RBC Credit Agreement automatically terminated upon the receipt by RBC of certain backstop letters of credit delivered by BMO.

2023 Credit Facility Terms

The2023 Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default. The2023 Credit Agreement 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: (1) a leverage ratio, by maintaining at all times; Total Funded Debt to Adjusted EBITDA Ratio, ofnot more than 3.75:1.00; and (2) an interest coverage ratio, by maintaining as of the end of each rollingfour financial quarter period, an Interest Coverage Ratio, (as defined in the Credit Agreement) ofnot less than 3.00:1.00. The required principal repayment of $190.4 million is due in* September 2027.*

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During the years ended* December 31, 2025and December 31, 2024the Company was in compliance with the covenants under its credit agreements in effect at the time. During the year ended December 31, 2025and December 31, 2024the Company recognized $0.6 million and $0.6 million, respectively, of interest expense related to the amortization of the debt issuance costs of the2023* Credit Facility.

Borrowings under the2023 Credit Agreement will accrue interest and standby fees based on the Company's Total Funded Debt to Adjusted EBITDA ratio and the availment type as follows:

The following table summarizes the Company’s borrowings under the credit facilities (Dollar amounts in thousands of U.S. dollars):

The following table summarizes our scheduled principal repayments as of* December 31, 2025* (Dollar amounts in thousands of U.S. dollars):

8. Notes Payable:

2024* Term Notes*

On* August 20, 2024,Tucows Inc., through its indirect and wholly owned subsidiaries, including Ting Fiber, LLC, entered into a definitive agreement relating to a securitized financing facility related to a privately placed securitization transaction. On August 20, 2024,the Issuer, a limited purpose, bankruptcy-remote, indirect wholly owned subsidiary of the Company, issued: (i) $55,000,000 of its 5.63% Secured Fiber Revenue Notes, Series2024*-1, Class A-2 (the*“2024* Class A-2 Notes”), (ii) $8,000,000 of its 6.85% Secured Fiber Revenue Notes, Series2024-1, Class B (the*“2024* Class B Notes”), and (iii) $16,000,000 initial principal amount of 9.15% Secured Fiber Revenue Notes, Series2024-1, (the “Class C Notes” together with the2024 Class A-2 Notes and the2024 Class B Notes, the*“2024* Term Notes”). The Tranche C notes werenot sold in this transaction, and they remain available for future sale depending on market conditions. The net proceeds from the issuance of the2024 Term Notes were $61.0 million, after deducting a debt discount of Nil and issuance costs of $2.0 million.

The2024 Term Notes were issued under the Base Indenture dated* May 4, 2023,and the related Series2024*-1 Supplement (the “Series2024-1 Supplement”), dated* August 20, 2024,by and between the Issuer, the asset parties thereto, and the Indenture Trustee Citibank, N.A., and securities intermediary. The Base Indenture and the Series2024*-1 Supplement allow the Issuer to issue additional series of notes in the future, subject to certain conditions set forth therein. Interest payments on the2024 Term Notes are payable on a monthly basis. The legal final maturity date of the2024 Term Notes is in* Augustof2054,* but, unless earlier prepaid to the extent permitted under the Indenture, the anticipated repayment date of the2024 Term Notes will be in* August 2029.*

The debt discount and issuance costs of the2024 Term Notes are being amortized using the straight-line method over afive-year period between* August 20, 2024*and the anticipated repayment date.

The2023 Term Notes and2024 Term Notes are secured by certain of the Company’s revenue-generating assets, consisting principally of fiber-network related agreements, fiber-network assets and customer contracts (collectively, the “Securitized Assets”) that are owned by certain other limited-purpose, bankruptcy-remote, wholly owned indirect subsidiaries of the Company that act as the Guarantors (collectively with the Issuer, the “Obligor”) under the Base Indenture. The2023 Term Notes and2024 Term Notes are subject to a series of covenants, restrictions and other investor protections including (i) that the Issuer maintains specified reserve accounts to be used to make required payments in respect of the2023 Term Notes and2024 Term Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, (iii) certain indemnification payments, (iv) the guarantors comply with standard bankruptcy-remoteness covenants, includingnot guaranteeing or being liable for other affiliates debts or liabilities, and (v) covenants relating to recordkeeping, access to information, and similar matters.

As of* December 31, 2025,the Company was in compliance with all required covenants. As of December 31, 2025,the Company's scheduled principal repayment of $238.5 million on the2023* Term Notes is due in* April 2028and the repayment of $63.0 million on the2024* Term Notes is due in* August 2029.*

During thetwelve months ended* December 31, 2025,the Company recognized $4.0 million of interest expense related to the amortization of the debt discount and issuance costs of the2023* Term Notes and2024 Term Notes. During thetwelve months ended* December 31, 2024,the Company recognized $3.7 million of interest expense related to the amortization of the debt discount and issuance costs of the2023* Term Notes and2024 Term Notes.

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The following table summarizes Ting Issuer LLC. borrowings under the2023 Term Notes and2024 Term Notes (Dollar amounts in thousands of U.S. dollars):

(1) The Company capitalizes interest expenses directly attributable to the development of qualifying assets. Qualifying assets include internal use software (IUS), assets under construction (AUC), equipment, or other long-lived assets that meet the capitalization criteria prescribed by ASC350. During the year ended* December 31, 2025,the Company capitalized$0.2 million of interest pertaining to the2023* and2024 Notes that were directly attributable to the development of certain AUC assets. During the year ended* December 31, 2024,the Company capitalized $1.2 million of interest expenses pertaining to the2023* and2024 Term Notes that were directly attributable to the development of certain AUC assets

Restricted Cash

Under the terms of the Indenture, revenues generated from the Securitized Assets are deposited into accounts controlled by the Indenture Trustee withintwo business days of receipt. The Company hasno access to or control of the funds held in trust until they are disbursed by the Indenture Trustee on the20th day of each calendar month (the “Payment Date”). In accordance with the Indenture, on each Payment Date the Indenture Trustee disburses, on behalf of the Obligor, administration fees to service providers, interest payments to the noteholders, liquidity reserve top-ups (if required), and the remaining funds to accounts controlled by the Obligor. Funds held in trust with the Indenture Trustee at the reporting date are presented as “Restricted cash” on the Company’s Consolidated Balance Sheet.

As of* December 31, 2025and December 31, 2024,*Restricted cash totaled $5.3 million and $4.6 million, respectively.

Under the terms of the Indenture, the Company is also required to maintain a liquidity reserve fund equal to the sum of (A)six times the total amount of fund administration fees payable on each payment date after* May 20, 2023and (B)six times the total amount of monthly interest on the2023* and2024 Term Notes due and payable on each payment date after* May 20, 2023.The liquidity reserve is maintained with the Indenture Trustee until the maturity of the2023* and2024 Term Notes and the balance is presented as “Secured notes reserve funds” on the Company’s Consolidated Balance Sheet.

As of* December 31, 2025and December 31, 2024,*Secured notes reserve funds totaled $12.2 million and $11.7 million, respectively.

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9. Income Taxes:

Income (loss) Before Taxes by Jurisdiction

Income (loss) before taxes by tax jurisdiction for the years ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023*, consisted of the following(Dollar amounts in thousands of U.S. dollars):

Income Tax Expense (Recovery) by Jurisdiction

Income tax expense (recovery) by tax jurisdiction for the years ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023*, consisted of the following(Dollar amounts in thousands of U.S. dollars):

F-30

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes for the years ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023*, as a result of the following (Dollar amounts in thousands of U.S. dollars):

(1) In2025, state and local taxes in North Carolina made up the majority of the tax effect in this category.

Our effective tax rate is impacted by an increase in valuation allowances on net operating losses and interest expense limitations that we arenot expected to realize in future years, and the tax owing on foreign earnings.

F-31

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of* December 31, 2025*, and* December 31, 2024* are presented below (Dollar amounts in thousands of U.S. dollars):

In assessing the need for a valuation allowance, historical and future levels of income, expectations, and risks associated with estimates of future taxable income and tax planning strategies are considered. In2025, we believe that it is more likely thannot that the tax benefit from deferred tax assets willnot be realized. As of* December 31, 2025,*a valuation allowance of $68.1 million is recorded against net deferred tax assets. The increase in the valuation allowance was primarily attributable to an increase in deferred tax assets resulting from net operating losses and interest expense limitations.

As of* December 31, 2025,*the Company had net federal and state operating loss carryforwards of approximately $306.7 million and interest expense carryforwards of $66.1 million. The majority of the net operating loss and interest expense carryforwards can be carried forward indefinitely.

As of* December 31, 2025,the Company had foreign tax credit carryforwards of $12.5 million. Foreign tax credits will start to expire beginning in the year ending December 31, 2027ifnot* otherwise utilized.

The Company had $0.1 million total gross unrecognized tax benefits as of* December 31, 2025andnil total gross unrecognized tax benefits as of December 31, 2024.*

The Company recognizes interest and penalties related to income tax matters within the provision for income taxes. As of* December 31, 2025,the Company recorded $0.8 million of interest in income taxes, primarily due to Internal Revenue Code Sec.453A interest on deferred tax liability for U.S. tax purposes. No other material interest and penalties were recognized as of December 31, 2025.*

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Income Taxes Paid by Jurisdiction

10. Revenue:

Significant accounting policy

The Company’s revenues are derived from (a) the provisioning of retail fiber Internet services and the design and construction of Fiber Optic Networks for specific customer contracts through Ting, (b) Communication Service Providers ("CSP") solutions and professional services through Wavelo; and from (c) domain name registration contracts, other domain related value-added services, domain sale contracts, other advertising revenue, and registry services through Tucows Domains Services. Certain revenues are disclosed under Corporate and all other as they are considered non-core business activities including retail mobile services, Transition Services Agreement ("TSA") revenue and eliminations of intercompany revenue. Amounts received in advance of meeting the revenue recognition criteria described below are recorded as contract liabilities. All products are generally sold without the right of return or refund.

Revenue is measured based on the consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf ofthird parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

Nature of goods and services

The following is a description of principal activities – separated by reportable segments – from which the Company generates its revenue. For more detailed information about reportable segments See "Note20. Segment Reporting".

The Company generates Ting revenues primarily through the provisioning of fixed high-speed Internet access, Ting Internet, and the design and construction of fiber optic network assets for a specific customer.

Ting Internet contracts provide customers Internet access at their home or business through the installation and use of our fiber optic network. Ting Internet contracts are generally prepaid and grant customers with unlimited bandwidth based on a fixed price per month basis. Because consideration is collected before the service period, revenue is initially deferred and recognized as the Company performs its obligation to provide Internet access. Though the Company doesnot consider the installation of fixed Internet access to be a distinct performance obligation, the fees related to installation are immaterial and therefore revenue is recognized as billed.

Ting Internet access services are primarily contracted through the Ting website, forone month at a time and containno commitment to renew the contract following each customer’s monthly billing cycle. The Company’s billing cycle for all Ting Internet customers is computed based on the customer’s activation date. In addition, revenue from the sale of internet hardware to subscribers is recognized when control transfers, which occurs upon shipment. Incentive marketing credits given to customers are recorded as a reduction of revenue.

In those cases where payment isnot received at the time of sale, revenue isnot recognized at contract inception unless the collection of the related accounts receivable is reasonably assured. The Company records 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.

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Our construction services relates to revenue earned from the design, construction and installation of a fiber optic network for a specific customer contract. Control of the network infrastructure transfers to the customer as it is constructed.

Revenue from network construction is recognized over time, as Ting’s performance creates or enhances an asset that the customer controls as it is being constructed. Progress toward completion is measured using an output method, based primarily on network build milestones such as served addresses completed and accepted by the customer. Amounts billed in advance of revenue recognition are recorded as contract liabilities, while amounts recognized in excess of billings are recorded as contract assets.

The Company has determined that it acts as principal in providing construction services, as it is primarily responsible for fulfilling the contract, controls construction inputs, and bears the risk associated with design, materials procurement, and subcontracted construction activities. Accordingly, construction revenue is recognized on a gross basis.

The Company generates Wavelo revenues by providing billing and provisioning platform services to CSPs to whom we also provide other professional services.

Platform service agreements contain both platform services and professional services. Platform services offer a variety of solutions that support CSPs, including subscription and billing management, network orchestration and provisioning, and individual developer tools through a single, cloud based service. Professional services provided under platform service arrangements can include implementation, training, consulting or software development/modification services. Platform services and professional services are considered to be separate performance obligations.

Consideration under platform service arrangements includes both a variable component that changes each month depending on the number of subscribers hosted on the platform, as well as a fixed component of platform payments and credits.

Platform payments and the associated credits are allocated between the platform services and professional services performance obligations by estimating the standalone selling price (“SSP”) of each performance obligation.

The Company estimates the SSP of professional services based on observable standalone sales. The SSP of platform services is derived using the residual approach by estimating the total contract consideration and subtracting the SSP of professional services.

Each month of providing access to the platform is substantially the same and the customer simultaneously receives and consumes the benefits as access is provided, therefore, the performance obligation consists of a series of distinct service periods. Accordingly, the platform services represent a single promise to provide continuous access (i.e. a stand-ready performance obligation) to the platform. Accordingly, the platform payment revenue allocated to platform services is recognized evenly over the term of the contract. Variable subscriber fees are allocated to the platform services and are recognized as the fees are invoiced.

Revenues related to professional services are distinct from the other promises in the contract(s) and are recognized as the related services are performed, on the basis of hours consumed.

Other professional services consist of professional service arrangements with platform services customers which are billed based on separate Statement of Work (“SOW”) arrangements for bespoke feature development. Revenues for professional services contracted through separate SOWs are recognized at a point-in-time when the final acceptance criteria have been met.

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Domain registration contracts, which can be purchased for terms ofone toten years, provide our resellers and retail registrant customers with the exclusive right to a personalized internet address from which to build an online presence. The Company enters into domain registration contracts in connection with each new, renewed and transferred-in domain registration. At the inception of the contract, the Company charges and collects the registration fee for the entire registration period. Although fees are collected upfront, revenue from domain registrations is recognized ratably over the registration period as the Company provides the customer with a domain registration service, which represents a distinct performance obligation satisfied over time. The registration period begins once the Company has confirmed that the requested domain name has been appropriately recorded in the registry under contractual performance standards.

Domain related value-added services like digital certifications, WHOIS privacy, website hosting and hosted email provide our resellers and retail registrant customers with tools and additional functionality to be used in conjunction with domain registrations. All domain related value-added services are considered distinct performance obligations which transfer the promised service to the customer over the contracted term. Fees charged to customers for domain related value-added services are collected at the inception of the contract, and revenue is recognized on a straight-line basis over the contracted term, consistent with the satisfaction of the performance obligations.

The Company is an ICANN accredited registrar. Thus, the Company is the primary obligor with our reseller and retail registrant customers and is responsible for the fulfillment of our registrar services to those parties. As a result, the Company reports revenue in the amount of the fees we receive directly from our reseller and retail registrant customers. Our reseller customers maintain the primary obligor relationship with their retail customers, establish pricing and retain credit risk to those customers. Accordingly, the Company doesnot recognize any revenue related to transactions between our reseller customers and their ultimate retail customers.

The Company also sells the rights to the Company’s portfolio domains or names acquired through the Company’s domain expiry stream. The domain expiry stream involves domain names whose registration has expired and as per ICANN regulations are placed into a40-day grace period. Though the domain names donot belong to the Registrant during the40-day grace period, the Company is restricted from allowing others to register them. The Company monetizes its domain expiry stream both through the sale of names and by allowing advertisers to place parked pages advertisements on the domains. Revenue generated from sale of domain name contracts, containing a distinct performance obligation to transfer the domain name rights under the Company’s control, is generally recognized once the rights have been transferred and payment has been received in full.

Advertising revenue is derived through domain parking monetization, whereby the Company contracts withthird-party Internet advertising publishers to direct web traffic from the Company’s domain expiry stream domains, surname domains and direct navigation domains to advertising websites. Compensation from Internet advertising publishers is calculated variably on a cost-per-action basis based on the number of advertising links that have been visited in a given month. Given that the variable consideration is calculated and paid on a monthly basis,no estimation of variable consideration is required.

Tucows Registry Services (“TRS”) provides registry platform and related technical services to operators of generic top-level domains (“gTLDs”), branded top-level domains, and country code top-level domains. These services include processing domain name transactions and maintaining the related infrastructure and support systems required to operate the registry. Revenue is primarily transaction-based and is calculated as a fixed fee per financial transaction processed during the month. Because customers simultaneously receive and consume the benefits of the registry services as they are provided, revenue is recognized in the period in which the transactions occur. Service level credits are treated as variable consideration and are recorded as a reduction of revenue in the period in which they are incurred.

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Disaggregation of Revenue

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

Corporate and all other includes revenues from Ting Mobile, corporate overhead functions, and other activities that donot* meet the criteria for separate reportable segment disclosure under ASC280. Ting Mobile isnot managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.

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As of* December 31, 2025*, one customer represented 44% of total accounts receivable. As of* December 31, 2024* one customer represented 56% of total accounts receivable.

During the years ended* December 31, 2025*,* December 31, 2024* and * December 31, 2023*, one customer within the Wavelo segment accounted for 11.7%,10.7% and 10.7% of revenue, amounting to $45.5 million, $38.8 million and $36.2 million, respectively.

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

Corporate and all other includes cost of revenues from Ting Mobile, corporate overhead functions, and other activities that donot* meet the criteria for separate reportable segment disclosure under ASC280. Ting Mobile isnot managed as a separate reportable segment and is included within Corporate and all other for purposes of segment reporting. Intersegment revenues and expenses are eliminated in consolidation.

Contract Balances

The following table provides information about contract liabilities from contracts with customers. The Company accounts for contract assets and liabilities on a contract-by-contract basis, with each contract presented as either a net contract asset or a net contract liability accordingly.

Some of the Company’s long-term contracts with customers are billed in advance of service, such as domain contracts, construction services and some professional service contracts. Consideration received from customers related to performance obligations which havenot yet been satisfied are recorded as contract liabilities.

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Contract liabilities primarily relate to the portion of the transaction price received in advance related to the unexpired term of domain name registrations and other domain related value-added services, on both a wholesale and retail basis, net of external commissions.

Significant changes in contract liabilities for the years ended* December 31, 2025and December 31, 2024*were as follows (Dollar amounts in thousands of U.S. dollars):

Remaining Performance Obligations:

As the Company fulfills its performance obligations, the following table includes revenues expected to be recognized in the future related performance obligations that are unsatisfied (or partially unsatisfied) as of* December 31, 2025* (Dollar amounts in thousands of U.S. dollars)

For retail mobile and internet access services, where the performance obligation is part of contracts that have an original expected duration ofone year or less (typicallyone month), the Company has elected to apply a practical expedient tonot disclose revenues expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied).

Although domain registration contracts are deferred over the lives of the individual contracts, which can range fromone toten years, approximately 86 percent of our contract liabilities balance related to domain contracts is expected to be recognized within the next twelve months.

Professional services revenue related to platform services agreements is deferred and recognized as hours are incurred over the contract term. Any revenue for unused professional service hours is recognized as revenue at the end of the contract period.

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11. Costs to obtain and fulfill a contract:

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the period of benefit of those costs to be longer thanone year and those costs are expected to be recoverable under the term of the contract. We have identified certain sales incentive programs and other customer acquisition fees that meet the requirements to be capitalized, and therefore, capitalized them as contract costs in the amount of $2.3 million at* December 31, 2025*.

Capitalized contract acquisition costs are amortized into operating expense typically over three years, based on the transfer of goods or services to which the assets relate. The breakdown of the movement in the deferred costs of acquisition balance for the year ended* December 31, 2025* and* December 31, 2024*is as follows (Dollar amounts in thousands of U.S. dollars):

When the amortization period for costs incurred to obtain a contract with a customer is less thanone year, we have elected to apply a practical expedient to expense the costs as incurred. These costs include our internal sales compensation program, certain partner sales incentive programs and other customer acquisition fees.

Deferred costs to fulfill contracts primarily consist of domain registration costs which have been paid to a domain registry, and are capitalized as deferred costs of fulfillment. These costs are deferred and amortized over the life of the domain which generally ranges fromone toten years. The Company also defers certain technology design and data migration costs it incurs to fulfil its performance obligations contained in our platform services arrangements. There wereno impairment losses recognized in relation to the costs capitalized during the year ended* December 31, 2025*. Amortization expense is primarily included in cost of revenue. The breakdown of the movement in the deferred costs of fulfillment balance for the year ended* December 31, 2025* and* December 31, 2024*is as follows (Dollar amounts in thousands of U.S. dollars):

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12. Leases:

We lease datacenters, corporate offices, antenna towers and fiber-optic cables under operating leases. The Company doesnot have any leases classified as finance leases.

Our leases have remaining lease terms of 1 year to 20 years, some of which* mayinclude options to extend the leases for up to 5 years, and some of which may*include options to terminate the leases within 1 year.

The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):

Lease expense is presented in general and administrative expenses and direct cost of revenues within our Consolidated Statements of Operations and Comprehensive Income (Loss).

Variable lease payments are determined based on specific terms and conditions outlined in the lease agreements. These* may*include payments for utilities, which are based on actual usage, and maintenance costs, which are determined based on expenses incurred.

Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):

Maturity of lease liability as of* December 31, 2025* (Dollar amounts in thousands of U.S. dollars):

Operating lease payments include payments under the non-cancellable term, without any additional amounts related to options to extend lease terms that arenot reasonably certain of being exercised.

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We have agreements with severalthird-party network partners who construct and operate fiber networks used to deliver our internet services. Under these arrangements, the partners build and activate new serviceable addresses each month. The financial terms of these arrangements* mayinclude fixed fees, variable fees, or a combination of both. The partners control and manage the construction. We donot* control the construction process and are thereforenot considered the owner during buildout. The leases for these addresses will commence once the lessor makes the underlying assets available for our use, to deliver services to our customers.

During thesecond quarter of Fiscal2025, the Company identified an immaterial error in the application of lease accounting for a long-term fiber network access agreement. Upon reassessment, the Company determined that only the initialthree-year exclusive-use period under the agreement met the definition of a lease under ASC842. The remaining term represents a service arrangement and shouldnot have been included in the ROU asset or operating lease liability calculation. As a result, the Company recorded a cumulative adjustment in thesecond quarter of Fiscal2025 to reduce previously recognized ROU assets and operating lease liabilities, and to recognize a catch-up lease expense totaling $3.0 million with a corresponding reduction in the ROU asset. The adjustment was recorded in the current period as the error wasnot material to previously issued financial statements.

As of* December 31, 2025*, we havenot entered into any lease agreements that havenot yet commenced, and therefore arenot included in the lease liability.

Impairment of ROU asset

During the year ended* December 31, 2025*, the Company recognized an impairment loss of $0.7 million related totwo warehouse-related ROU assets. The impairment was triggered by management’s decision to cease use of thetwo warehouses and to implement a plan of abandonment for those locations.

In accordance with ASC842 and the impairment guidance in ASC360, the Company performed a recoverability assessment and determined that the carrying amounts of the ROU assets werenot recoverable. The ROU assets were written down to their estimated fair value. In accordance with ASC820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The impairment loss is recorded within “Impairment of property and equipment” in the Consolidated Statement of Operations and Comprehensive Income (Loss) and the related lease liabilities remain on the balance sheet and continue to be measured using the effective interest method.

13. Redeemable preferred units:

On* August 8, 2022 (the “Effective Date”), Ting Fiber, LLC (“Ting”) entered into a Series A Preferred Unit Purchase Agreement (the “Unit Purchase Agreement”) with Generate, and closed the transaction on August 11, 2022 (the “Transaction Close”). Ting issued and sold 10,000,000 Series A Preferred Units to Generate at $6.00 per unit, resulting in gross proceeds of $60.0 million. The investment provided an additional $140 million of capital commitments available to Ting over the subsequentthree*-year period, if certain milestones were achieved.

On* December 5, 2022,Ting issued and sold an additional 4,583,333 Series A Preferred Units for gross proceeds of $27.5 million. During the year ended December 31, 2023,*Ting issued an aggregate of 5,833,333 additional Series A Preferred Units for gross proceeds of $35.0 million.

On* May 4, 2023,*Ting redeemed 5,173,067 Series A Preferred Units for $45.7 million, including a make-whole premium of $14.7 million. The redemption was accounted for as a debt extinguishment, and the associated loss was recognized in other income (expense).

As of* December 31, 2025,the redeemable preferred units have an aggregate liquidation preference of $91.5 million, plus a make-whole premium should redemption occur before thefourth* anniversary of the Transaction Close and are senior to the Ting Fiber, LLC common units with respect to sale, dissolution, liquidation or winding up of the Company.

Ting had the option to issue additional Series A Preferred Units through* August 8, 2025,*subject to milestone achievement. Until this date, Ting was required to pay a standby fee of 0.50% per annum on the undrawn commitment, payable quarterly.

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The Series A Preferred Units accrue a preferred return at 15% per annum, subject to adjustment between 13% and 17% based on certain project approval and contribution conditions. The preferred return accrues daily and compounds quarterly. The preferred return accrued during thefirst two years isnot payable unless and until the Series A Preferred Units are redeemed. The preferred return accrued after thesecond anniversary of the Transaction Close is payable by the Company quarterly.

Ting incurred $0.8 million of legal fees related to the redeemable preferred unit issuance, which have been reflected as a reduction to the carrying amount of the redeemable preferred unit balance and will be amortized to interest expense, net in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss) over the expectedsix-year term of the instrument.

The liability was initially recorded at fair value and subsequently recorded at the present value of the settlement amount, which includes the preferred return payments required until the instrument's expected maturity on thesixth anniversary of the Transaction Close,* August 10, 2028using the implicit rate of return of the instrument,15%. Ting recorded an interest expense of $19.3 million, of which $14.7 million was accreted, for the year ended December 31, 2025.Ting recorded an interest expense of $18.3 million, of which $10.7 million was accreted, for the year ended December 31, 2024.*Interest expense related to amortization of issuance costs was $0.1 million in each of those years.

Commencing in thesecond quarter of2025, Ting hasnot paid the quarterly preferred return. The unpaid amount as of* December 31, 2025*is $14.7 million and has been added to the redeemable preferred units balance in the Consolidated Balance Sheets. The impact of this failure to pay is outlined below under Return Breach and Trigger Event.

The following table summarizes the Company’s borrowings under the preferred unit agreement (Dollar amounts in thousands of U.S. dollars):

(1) The Company capitalizes interest expenses directly attributable to the development of qualifying assets. Qualifying assets include internal use software (IUS), assets under construction (AUC), equipment, or other long-lived assets that meet the capitalization criteria prescribed by ASC350. During the years ended* December 31, 2025,and December 31, 2024*the Company capitalized $0.2 million and $1.3 million of interest expenses pertaining to the redeemable preferred units directly attributable to the development of certain AUC assets, respectively.

Return Breach and Trigger Event

On* December 1, 2025,Ting received written notice from Generate asserting that a Return Breach had occurred due to Ting’s failure to pay the quarterly preferred return for thesecond* andthird quarter of2025 and to cure such nonpayment within60 days. Generate further asserted that such Return Breach constituted a Trigger Event under the Ting Fiber LLC Amended and Restated Limited Liability Company Agreement, dated as of* August 11, 2022 (the "LLC Agreement") and reserved its rights to pursue available remedies under the LLC Agreement and applicable law. Such remedies include the right to elect conversion of the Series A Preferred Units into common units of Ting or a call right to purchase certain fiber network assets of Ting at the lower of the fair market value of such assets, and the aggregate invested capital in such assets plus10%.* Generate hasnot exercised either of these rights as of* December 31, 2025.*

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Additionally, as a result of the Return Breach and related Trigger Event asserted by Generate on* December 1, 2025,Generate has the ability, at its option, to make a request for redemption of all Series A Preferred Units, requiring Ting redeem all outstanding Series A Preferred Units within30* days of such request (a "Redemption Request"). The redemption price under such a request includes the original issue price, any unsatisfied preferred return, as well as a make-whole premium. As Ting would be required to settle the obligation within30 days of a Redemption Request being submitted, the redeemable preferred units were reclassified from long-term to current liabilities in the Consolidated Balance Sheet as of* December 31, 2025.If Ting did receive a Redemption Request from Generate, Ting would be required to pay Generate an estimated $204.9 million, representing the redemption price. As of December 31, 2025,Generate hadnot* submitted a redemption request, and payment of the Redemption Price was due.

The rights asserted by Generate in connection with the Return Breach relate to Ting and its subsidiaries, and such rights under the LLC Agreement donot extend to, or otherwise impose any liability upon, Tucows Inc. or its other subsidiaries. Under the LLC Agreement, the remedies available to Generate following a Return Breach are limited to the equity interests and assets of Ting and its subsidiaries, and are subordinate to the rights of the secured noteholders under Ting's asset-backed securitization facilities. Accordingly, the occurrence of the Return Breach and any exercise of rights by Generate donot affect Ting's securitized debt structure and haveno impact on the ABS facilities or the collateral securing them. Further, there isno impact of the Return Breach or Trigger Event on the Company's2023 Credit Facility described in "Note7. Syndicated Revolver."

14. Common Shares:

The Company’s authorized common share capital is 250 million shares of common stock without nominal or par value. On* December 31, 2025*, there were 11,111,453 shares of common stock outstanding (* December 31, 2024*:11,014,655).

Repurchase of common shares:

(a) Normal Course Issuer Bids:

2026 Stock Buyback Program

On* February 12, 2026,the Company announced that its Board of Directors (“Board”) had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 13, 2026and is expected to terminate on or before February 12, 2027.*

2025 Stock Buyback Program

On* February 13**2025,* the Company announced that its Board had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on* February 14, 2025and terminated on February 12, 2026.*The Company didnot repurchase shares under this program.

2024 Stock Buyback Program

On* February 22, 2024,the Company announced that its Board had approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 23, 2024and terminated on February 13, 2025.*The Company didnot repurchase shares under this program.

(b) Net Exercise of Stock Options

Our current equity-based compensation plans include provisions that allow for the “net exercise” of stock options by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option holder can be paid for by having the option holder tender back to the Company a number of shares at fair value equal to the amounts due. These transactions are accounted for by the Company as a purchase and retirement of shares and are included in the table on the following page as common stock received in connection with share-based compensation.

The Company didnot repurchase any shares of common stock during the years ended* December 31, 2025,*2024, or2023. In addition,no common stock was received in connection with share-based compensation during any of these periods.

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15. Stock Option Plans:

2006 Tucows Equity Compensation Plan

On* November 22, 2006,the shareholders of the Company approved the Company’s2006* Equity Compensation Plan (the*“2006* Plan”), which was amended and restated effective* July 29, 2010and which serves as a successor to the1996* Plan. The2006 Plan has been established for the benefit of the employees, officers, directors and certain consultants of the Company. The maximum number of common shares which had initially been set aside for issuance under the2006 Plan is 1.25 million shares. On* October 8, 2010,the2006* Plan was amended to increase the number of shares set aside for issuance by an additional 0.475 million shares to 1.725 million shares. In* September 2015,the2006* Plan was amended to increase the number of shares set aside for issuance by an additional 0.75 million shares to 2.475 million shares. In* November 2020,the2006* Plan was amended to increase the number of shares set aside for issuance by an additional 1.53 million shares to 4.0 million shares. Generally, options issued under the2006 Plan vest over afour-year period and have a termnot exceeding seven years, except for automatic formula grants of nonqualified stock options, which vest afterone year and have afive-year term. Prior to the* September 2015amendment to the2006* Plan, automatic formula grants of nonqualified stock options vested immediately upon grant.

Our current equity-based compensation plans include provisions that allow for the “net exercise” of stock options by all plan participants. In a net exercise, any required payroll taxes, federal withholding taxes and exercise price of the shares due from the option holder can be paid for by having the option holder tender back to the Company a number of shares at fair value equal to the amounts due. These transactions are accounted for by the Company as a purchase and retirement of shares.

The fair value of each option grant ("Company Option") is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. 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 Tucows Inc. common shares at the date of grant.

The fair value of Company Options granted during the years ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023* was estimated using the following weighted average assumptions:

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Details of Company Option transactions are as follows:

As of* December 31, 2025*, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were for Company Options were as follows:

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Total unrecognized compensation cost relating to unvested Company Options at * December 31, 2025* , prior to the consideration of expected forfeitures, is approxi mately $3.0 million and is expected to be recognized over a weighted average period of 2.6 years.

There wereno exercises of Company Options during the years ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023.*

The Company recorded stock-based compensation for Company options amounting to $4.1 million, $5.2 million and $6.0 million for the years ended* December 31, 2025*,2024 and2023 respectively. Stock-based compensation for the Company stock has been included in operating expenses as follows (Dollar amounts in thousands of U.S. dollars):

2022 Wavelo Equity Compensation Plan

On* November 9, 2022the Board of Wavelo approved Wavelo's Equity Compensation Plan (Wavelo ECP), which has been established for the benefit of the employees, officers, directors and certain consultants of Wavelo or Tucows. The Wavelo stock options were introduced in order to provide variable compensation that helps retain executives and ensures that our executives' interests are aligned with those stakeholders of the business to grow long-term value. Wavelo is a wholly owned subsidiary of Tucows. The maximum number of Wavelo common shares which have been set aside for issuance under the2022* Plan is 20 million shares, currently there are 100 million shares outstanding. The options issued under the ECP primarily vest over a period ofthree years and have a 7-year term. For the initial grants under the plan, thefirst 25% became exercisable withinthree months and vesting ratably monthly thereafter, subsequently forthree years. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share-based instrument. The Company recognizes forfeitures as they occur.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Because option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. The Company calculates expected volatility based on the actual volatility of comparable publicly traded companies. 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 assumes the expected dividend yield to be zero.

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The fair value of stock options granted during the year ended* December 31, 2025* was estimated using the following weighted average assumptions:

Details of Wavelo's stock option transactions are as follows:

During the year ended* December 31, 2025and December 31, 2024,*the total intrinsic value of the Wavelo stock options exercised was $0.1 million, and the cash received from the exercise of those stock options was $0.1 million, respectively.

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As of* December 31, 2025*, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were for Wavelo stock options were as follows:

Total unrecognized compensation cost relating to unvested Wavelo stock options at* December 31, 2025*, prior to the consideration of expected forfeitures, is approxi mately$2.2 million and is expected to be recognized over a weighted average period of 2.9 years.

The Company recorded stock-based compensation for Wavelo options amounting to $1.6 million, $1.6 million and $1.8 million for the years ended* December 31, 2025*,2024 and2023, respectively. Stock-based compensation for the Wavelo stock has been included in operating expenses as follows (Dollar amounts in thousands of U.S. dollars):

2022 Ting Equity Compensation Plan

On* January 16, 2023,the Board of Ting Fiber, LLC approved Ting's Equity Compensation Plan (Ting ECP), which has been established for the benefit of the employees, officers, directors and certain consultants of Ting or Tucows. The Ting stock options were introduced in order to provide variable compensation that helps retain executives and ensure that our executives' interests are aligned with those stakeholders of the business to grow the long-term value. The maximum number of Ting common units that have been set aside for issuance under the plan is 10 million units, currently there are 100 million common units outstanding. Generally, options issued under the ECP vest over afour-year period and have a termnot* exceeding seven years. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of the share-based instrument at the time of the grant and are recognized as expense over the vesting period of the share based instrument.

The Company calculates expected volatility based on the actual volatility of comparable publicly traded companies. 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 assumes the expected dividend yield to be zero.

The fair value of stock options granted during the year ended* December 31, 2025* was estimated using the following weighted average assumptions:

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Details of Ting's stock option transactions are as follows:

As of* December 31, 2025*, the exercise prices, weighted average remaining contractual life of outstanding options and intrinsic values were for Ting stock options were as follows:

Total unrecognized compensation cost relating to unvested stock options at * December 31, 2025*, prior to the consideration of expected forfeitures, is approximately $0.4 million and is expected to be recognized over a weighted average period of 1.2 years.

The Company recorded stock-based compensation for Ting options amounting to $1.5 million, $0.2 million and $0.3 million for the years ended* December 31, 2025*,2024 and2023 respectively. Stock-based compensation for the Ting stock has been included in operating expenses as follows (Dollar amounts in thousands of U.S. dollars):

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The Company recorded stock-based compensation expense of $7.1 millionfor year ended* December 31, 2025and $7.0 million and $8.1 million for the years ended December 31, 2024and December 31, 2023,*respectively. The Company details of the stock-based compensation expense are as follows:

The Company capitalizes stock-based compensation costs directly attributable to the development of qualifying assets. Qualifying assets include internal use software (IUS), assets under construction (AUC), equipment, or other long-lived assets that meet the capitalization criteria prescribed by ASC350. During the year ended* December 31, 2025and December 31, 2024,*the Company capitalized $0.2 million and $0.3 million of stock-based compensation respectively, directly attributable to the development of certain IUS assets.

During thefourth quarter of Fiscal2025, the Company identified an immaterial error in stock-based compensation expense related to the omission from the financial statements of a stock-based compensation arrangement. The Company determined that this stock-based compensation agreement should have been accounted for under ASC718 as a liability measured as of each reporting period at fair value, with a corresponding stock-based compensation expense recorded in the Consolidated Statements of Comprehensive Loss over the service period to* June 2027.As a result, the Company recorded a cumulative adjustment in thefourth* quarter of Fiscal2025 to recognize a catch-up expense totaling $1.4 million, with a corresponding long-term liability on the balance sheet. The adjustment was recorded in the current period as the error wasnot material to previously issued financial statements.

16. Foreign Exchange:

A foreign exchange loss amounting to $0.1 million has been recorded in general and administrative expenses during the year ended* December 31, 2025,*2024 and2023, respectively.

17. Other Income (Expenses):

On* August 1, 2020,the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”), by and between the Company and DISH Wireless L.L.C. ("EchoStar", DISH's post-merger parent). Under the Purchase Agreement and in accordance with the terms and conditions set forth therein, the Company sold to EchoStar its mobile customer accounts that are marketed and sold under the Ting brand (other than certain customer accounts associated withone* network operator) (“Transferred Assets”). For a period of 10 years following the execution of the Purchase Agreement, EchoStar will pay a monthly fee to the Company generally equal to an amount of net revenue received by EchoStar in connection with the transferred customer accounts minus certain fees and expenses, as further set forth in the Purchase Agreement.

The Company accounts for investment in entities over which it has the ability to exert significant influence, but doesnot control and isnot the primary beneficiary of, using the equity method of accounting. The Company includes the proportionate share of earnings (loss) of the equity method investees in Other Income.

The Company earned the amounts noted in the table below during the years ended* December 31, 2025,** December 31, 2024and December 31, 2023 (*Dollar amounts in thousands of U.S. dollars.)

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The following table provides additional information relating to Interest expense, net (Dollar amounts in thousands of U.S. dollars):

18. Earnings Per Common Share:

The following table reconciles the numerators and denominators of the basic and diluted loss per common share computation (Dollar amounts in thousands of U.S. dollars, except for share data):

For the year ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023*the Company recorded a net loss, thus all outstanding options were considered anti-dilutive and excluded from the computation of diluted income per common share.

19. Commitments and Contingencies:

(a) The Company has several non-cancelable purchase obligations primarily for service contracts for mobile telephone services and equipment that expire over the nextten years. Future minimum payments under these agreements are as follows (Dollar amounts in thousands of U.S. dollars):

(1) Purchase obligations include all other legally binding service contracts for mobile telephone services and other operational agreements to be delivered during Fiscal 2026 and subsequent years. (2) Purchase obligations include minimum revenue commitments of $0.9 million with the Company's Mobile Network Operator partner for 2026.

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(b) On* February 9, 2015*Ting, entered into a lease and network operation agreement with the City of Westminster, Maryland (the “City”) relating to the deployment of a new fiber network throughout the Westminster area (“WFN”).

Under the agreement, the City will finance, construct, and maintain the WFN which will be leased to Ting for a period often years. The network will be constructed in phases, the scope and timing of which shall be determined by the City, in cooperation with Ting.

Under the terms of the agreement, Ting* maybe required to advance funds to the City in the event of a quarterly shortfall between the City’s revenue from leasing the network to Ting and the City’s debt service requirements relating to financing of the network. Ting could be responsible for shortfalls between $50,000 and $150,000 per quarter. In Fiscal2016,* the City has entered into financing for the construction of the WFN which allows the City to draw up to $21.0 million from their lenders over the next five years with interest only payments during that period with a loan maturity of 30 years. As of* December 31, 2025*, the City has drawn $16.2 million and the City’s revenues from Ting exceed the City’s debt service requirements. The Company doesnot believe it will be responsible for any shortfall in Fiscal2026.

(c)On* September 17, 2018Ting entered into a non-exclusive access and use agreement with SiFi Networks Fullerton, LLC (“SiFi”). The agreement established afifteen*-year term during which Ting has the non-exclusive right to act as an Internet service provider for a fiber-optic network to be constructed in the city of Fullerton, California. Under the terms of the agreement, SiFi is fully responsible for constructing, operating and maintaining a wholesale fiber-optic network, as well as the financing of those activities.

Ting is responsible for paying a fee per subscriber to SiFi. Through a “take or pay” arrangement, Ting has agreed to certain minimum charges based on minimum subscriber rates. These minimum fees are variable based on the percentage completion of the fiber optic network, and thus havenot been considered an unconditional purchase obligation for the purposes of the table in Note19 (a). Ting is currently disputing certain charges from SiFi and has ceased accruing for these amounts which amount to $2.0 million as of* December 31, 2025,as it believes payment is unlikely. The commitment amounts disclosed in the schedule reflect only the charges that Ting continues to accrue. Given the ongoing dispute, these amounts may*be subject to change.

(d)On* November 4, 2019Ting entered into an access and use agreement with Netly, LLC (“Netly”). The agreement establishestwelve*-year term wherein Ting will be granted the right to act as an Internet service provider for fiber-optic networks to be constructed in and around the cities of Solana Beach, California. Under the terms of the agreement, Ting will have a3-year “Headstart” period over each completed segment of the network, whereby Ting shall be the exclusive provider of services to subscribers during the “Headstart” period. Netly is fully responsible for constructing, operating and maintaining a wholesale fiber optic network, as well as the financing of those activities.

Ting is responsible for paying a fee per subscriber to Netly, as well as an unlit door fee for each serviceable addressnot subscribed. Through a “take or pay” arrangement, Ting has agreed to certain minimum charges based on minimum subscriber rates. To the extent that construction of the fiber optic network is complete, our minimum commitments have been included in the contractual lease obligations in "Note12. Leases". The Company has an ongoing billing dispute with Netly regarding the rates and methodology under which it can invoice our Ting Fiber division for our operations. The Company reflected its future commitment under this agreement consistent with the amounts it has historically accrued in accordance with ASC450-20 and, in accordance with the definition of probable loss described therein, and paid. At this time the Company believes that the probability that this dispute will have a material adverse effect on the business, operating results or financial condition is remote.

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(e) On* January 7, 2022,Ting Fiber, Inc., entered into a25*-year lease agreement with Colorado Springs Utilities (“CSU”), a municipally owned utility. The lease agreement named Ting Fiber the anchor tenant on a city-wide fiber network that is intended to pass a maximum of275,000 homes in Colorado Springs, Colorado. CSU began construction inQ2 of2023. The lease obligates Ting, and its ultimate parent Tucows, Inc., to pay a per month fee for addresses passed by the network (as they are passed and become serviceable for customers to connect to the network) and for certain fiber infrastructure, including co-location space. Based on the Company's current projection of approximately150,000 homes to be passed, total lease costs over thetwenty-five-year term are estimated at approximately $327.6 million, however the minimum fees are variable based on the percentage completion of the fiber optic network and these costs* maybe higher should the timing of delivery or amount of addresses passed be different from our estimate. Future committed fees associated with completed portions of the network have been included in the contractual lease obligations. Future fees associated with portions of the network that have yet to be constructed havenot* been considered an unconditional purchase obligation.

(f) On* May 11, 2022,Ting Fiber, LLC, entered into a "Rights-of-Way" agreement with the City of Alexandria, Virginia whereby the City granted Ting Fiber the obligation to install, place, construct, maintain, operate, upgrade, repair, and replace a Communications System to provide Broadband Services within the Public Rights-of-Way (a space in, upon, above, along, across, over and below the public and City-owned property that is used as a public rights-of-way) for a fee. Per the agreement, Ting Fiber is to pay the City throughout the20*-year term of the agreement, an amount equal to3% of Ting Fiber's Broadband Revenues once the network is live, and subscribers are obtained, and this fee is to be paid on a quarterly basis. The agreement commenced once Ting Fiber launched its network in Alexandria in* March 2023.Since these fees are currently variable in nature, they havenot* been considered an unconditional purchase obligation for the purposes of the table in Note19(a).

(g) On* November 1, 2023,the Company, entered into a Network Access and Use Agreement with Blue Suede Networks, LLC, which granted Ting Fiber the right to use the fiber communications network to be constructed by Blue Suede Networks, LLC to provide high-speed broadband Internet Access services to end-user residential and small and medium sized business customers in the city of Memphis, Tennessee. The agreement grants the Company an exclusivity period of5* years. The agreement requires the Company to pay the greater of a minimum revenue commitment based on minimum subscriber rates and a revenue share. Future fees associated with portions of the network havenot been considered an unconditional purchase obligation.

(h) In the normal course of its operations, the Company becomes involved in various legal claims and lawsuits. The Company intends to vigorously defend these claims. While the final outcome with respect to any actions or claims outstanding or pending as of* December**31,* 2025 cannot be predicted with certainty, management doesnot believe that the resolution of these claims, individually or in the aggregate, will have a material adverse effect on the Company’s financial position.

20. Segment Reporting:

Reportable operating segments:

We are organized and managed based onthree reportable segments which are differentiated primarily by their services, the markets they serve and the regulatory environments in which they operate.No operating segments have been aggregated to determine our reportable segments.

Our reportable operating segments and their principal activities consist of the following:

1. Ting - This segment derives revenue from the retail high speed Internet access to individuals and small businesses primarily through the Ting website. Revenues are generated in the United States.

2. Wavelo – This segment derives revenue from platform and other professional services related to communication service providers, including Mobile Network Operators and Internet Service Providers, and are primarily generated in the United States.

3. Tucows Domains – 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. Domain Services revenues are attributed to the country in which the contract originates, primarily Canada and the United States.

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Our segmented results include shared services allocations to the operating segments, including a profit margin, for Finance, Human Resources and other technical services. In addition, Wavelo charges Ting a subscriber based monthly charge service rendered. Financial impacts from these allocations and cross segment charges are eliminated as part of the consolidation.

Key measure of segment performance:

The CEO, as the chief operating decision maker, regularly reviews the operations and performance by segment. The CEO reviews Segment Adjusted EBITDA (as defined below) as (i) a key measure of performance for each segment and (ii) to make decisions about the allocation of resources. Depreciation of property and equipment, amortization of intangible assets, impairment of indefinite life intangible assets, gain on currency forward contracts and other expense net are organized along functional lines and arenot included in the measurement of segment profitability. Total assets and total liabilities are centrally managed and arenot reviewed at the segment level by the CEO.

Our key measure of segment performance is Segment Adjusted EBITDA.

We calculate this as segment revenue together with recurring income earned on sale of transferred assets, less cost of revenue, network expenses and certain operating expenses attributable to each segment, such as sales and marketing, technical operations and development, general and administration expenses. Segment Adjusted EBITDA excludes unrealized gains (losses) on foreign exchange, stock-based compensation and transactions that arenot indicative of ongoing performance, including acquisition and transition costs. Certain revenues and expenses are excluded from segment Adjusted EBITDA results as they are centrally managed andnot monitored by or reported to our CEO by segment, including mobile retail services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate IT.

The Company believes that Adjusted EBITDA is an important indicator of the operational strength and performance of its segments, by identifying those items that arenot directly a reflection of each segment’s performance or indicative of ongoing operational and profitability trends.

The Chief Operating Decision Maker ("CODM") uses Adjusted EBITDA to evaluate the overall recurring profitability of each operating segment after accounting for overhead costs. Adjusted EBITDA is evaluated by the CODM by comparing current period to historical and forecasted results and is used to inform strategic decisions over segment profitability, operational efficiency, pricing strategies, cost optimization, customer churn, competitor benchmarking and cash flow.

Information by reportable segments (with the exception of disaggregated revenue, which is discussed in “Note10. Revenue”), which is regularly reported to the chief operating decision maker, and the reconciliations thereof to our income before taxes, are set out in the following tables (Dollar amounts in thousands of U.S. dollars):

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(1) Intercompany revenues earned for provision of services on the ISOS and SM platforms between Wavelo and Ting are included in Wavelo's segment revenues for purposes of segment analysis, but are ultimately eliminated upon consolidation.

(2) Network Costs in segment reports provided to the CODM include certain construction expenses for Ting, which are reported as Direct Costs of Revenue in the Consolidated Statements of Operations and Comprehensive Loss.

(3) Other segment items for each reportable segment includes other income, as well as adjustments to add back (deduct): gains and losses from unrealized foreign currency, stock-based compensation expense and acquisition and transition costs, which are included in other line items but are excluded from our definition of Segment Adjusted EBITDA.

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The following table reconciles Segment Adjusted EBITDA for the period to Net loss before tax for the years ended* December 31, 2025,*2024 and2023.

(1) Items that are centrally managed andnot monitored by or reported to our CEO by segment, including retail mobile services, eliminations of intercompany transactions, portions of Finance and Human Resources that are centrally managed, Legal and Corporate IT.

(2) Acquisition and other costs represent transaction-related expenses and transitional expenses. Expenses include severance or transitional costs associated with department, operational or overall company restructuring efforts, including geographic alignments.

Revenue from sources outside of Canada and The United States of America comprises less than10% of our total operating revenue.

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

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

Under ASC326, the Company assesses the adequacy of its allowance for expected credit losses based on historical loss experience, current economic conditions and reasonable forecasts. Our evaluation considers the short-term nature of our receivables and the high credit quality of our customer base, which mitigates significant credit risk exposure.

(d) The following table summarizes our expected credit losses (Dollar amounts in thousands of U.S. dollars):

21. Restructuring Costs:

**** February 2024Workforce Reduction**

On* February 7, 2024,Ting committed to the February 2024workforce reduction ( "February 2024Workforce Reduction") which aimed to realign the Company's operational structure within the Ting operating segment and reduce Ting's workforce by 13%, or 7% of the Company’s total workforce, to better align with strategic objectives. The February 2024Workforce Reduction was designed to streamline operations and reduce operating expenses within the Ting operating segment. Substantially all of the employees impacted by the workforce reduction were notified on February 7, 2024*and have since exited the Company.

During the year ended* December 31, 2025,and December 31, 2024,the Company incu rred NIL and $3.2 million, respectively, in costs related to the February 2024Workforce Reduction, which were accounted for underASC420 - Exit or Disposal Cost Obligations.These costs associated with the February 2024*Workforce Reduction predominantly consisted of termination benefits for the terminated employees associated with the restructuring, and to a lesser extent, continuation of benefits and outplacement costs.

2024 Capital Efficiency Plan

On* October 30, 2024,the Company expanded its cost-reduction efforts with the implementation of a2024* Capital Efficiency Plan (the*"2024* Capital Efficiency Plan"). The Plan was designed to further align operations with strategic priorities, improve operational efficiency, and reduce operating expenses within Ting.

In connection with the2024 Capital Efficiency Plan, the Company incurred restructuring chargesof NIL and $7.7 million during the years ended* December 31, 2025and December 31, 2024,*respectively. These charges primarily consisted of termination benefits for the terminated employees associated with the restructuring, continuation of benefits, outplacement costs and professional services.

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The components of the restructuring charges were as follows (Dollar amounts in thousands of U.S. dollars):

The liability for the* February 2024Workforce Reduction and2024* Capital Efficiency Plan were included in "Accounts Payable and Accrued liabilities" in the consolidated balance sheet, and the following tables summarize the related activity for the* February 2024workforce reduction and2024* Capital Efficiency Plan for the years ended* December 31,2024 and December 31,*2025 (Dollar amounts in thousands of U.S. dollars):

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22. Additional Financial Information:

The following tables provide additional financial information related to our Consolidated Financial Statements (Dollar amounts in thousands of U.S dollars):

Inventories

The components of the inventories as of* December 31, 2025and December 31, 2024*were as follows (Dollar amounts in thousands of U.S dollars):

23. Subsequent Events:

2026 Stock Buyback Program

On* February 12, 2026,the Company announced that its Board of Directors (“Board”) has approved a stock buyback program to repurchase up to $40 million of its common stock in the open market. The $40 million buyback program commenced on February 13, 2026and is expected to terminate on February 12, 2027.The previously announced $40 million buyback program for the period February 13, 2025to February 12, 2026*was terminated.

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CONDENSED FINANCIAL STATEMENTS OF TUCOWS INC.

(PARENT COMPANY)

All operating activities of Tucows Inc. (the “Parent Company”) are primarily conducted by its operating subsidiaries, Tucows.com Co (“Tucows.com Co”), Enom LLC ("Enom"), EPAG Domainservices GmbH (“EPAG”), Ascio Technologies, Corp (“Ascio”), Ting Inc. (“Ting Inc”), Wavelo, Inc. (“Wavelo”) and Ting Fiber, LLC (“Ting Fiber”), Ting Internet, LLC ("Ting Internet"), Simply Bits, LLC ("Simply Bits"), Zippytech, LLC ("Zippytech"), Ting-Memphis Co, ("Ting Memphis").

The Parent Company holds a direct 100% ownership interest in Tucows (Delaware) Inc. ("Tucows Delaware"), which holds the Parent Company’s interest in its operating subsidiaries. The Parent Company is a holding company that doesnot conduct any substantive business operations and doesnot have any assets or liabilities other than cash and cash equivalents, accounts receivables, prepaid expenses, intangible assets, derivative instruments, accounts payables, accrued liabilities, investments in its subsidiaries and due to related party. The operations of Ting Fiber, LLC are partially funded through Redeemable preferred units which have restrictions on the ability to pay dividends, loan funds and make other upstream distributions to the Parent Company without prior approval by the holder of the Redeemable preferred units.

These Condensed Parent Company financial statements have been prepared using the same accounting principles and policies described in the notes to the Consolidated Financial Statements. Refer to the Consolidated Financial Statements and notes presented above for additional information and disclosures with respect to these condensed financial statements.

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SCHEDULE I - CONDENSED BALANCE SHEETS

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SCHEDULE I - CONDENSED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

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SCHEDULE I - CONDENSED STATEMENTS OF CASH FLOWS

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SCHEDULE I - NOTES TO THE CONDENSED FINANCIAL STATEMENTS

NOTE1. BASIS OF PRESENTATION

Tucows Inc. (the “Parent Company”) is a holding company that conducts substantially all of its business operations through its subsidiaries. The Parent Company holds a direct 100% ownership interest in Tucows (Delaware) Inc., which holds the Parent Company’s interest in Tucows.com Co (“Tucows.com Co”), Enom LLC ("Enom"), EPAG Domainservices GmbH (“EPAG”), Ascio Technologies, Corp (“Ascio”), Ting Inc. (“Ting Inc”), Wavelo, Inc. (“Wavelo”) and Ting Fiber, LLC (“Ting Fiber”).

The Parent Company was incorporated under the laws of the Commonwealth of Pennsylvania in* November 1992under 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.

The Parent Company was established to allocate capital and manage internet and telecom infrastructure businesses. Through its operating subsidiaries, the Parent Company offers a broad range of services including fixed Internet access, billing and subscription management platform services for communication service providers and distribution of global internet services through the provision of domain name registrations, digital certificates and email services.

As of* December 31, 2025,*Ting Fiber LLC, had restricted net assets of $(120.3) million. These restrictions primarily limit our ability to transfer funds from our subsidiaries without violating contractual agreements. The Company continuously evaluates the impact of these restrictions on liquidity and capital resource planning.

The Company operates within a consolidated tax group, comprising the Parent Company and its wholly-owned subsidiaries. Deferred taxes arenot separately identified and recorded at the parent level.

No dividends have been received from any of our subsidiaries in the pastthree years.

Change in basis of presentation for Investments in non controlled entities account and adjustment of prior period reported amounts

Certain immaterial amounts in the2024 Parent Company Condensed Financial Statements have been adjusted to change the basis of presentation of the Investments in non-controlled entities. These changes hadno impact on total net income and total shareholders' equity previously reported in the comparative figures presented in the Parent Company Condensed Financial Statements.

NOTE2. COMMITMENTS AND CONTINGENCIES

The Parent Company and its subsidiaries, excluding Ting Fiber, LLC, have revolving credit facilities throughthird-party financial institutions. The total available amount on the credit facilities is $240 million, and as of* December 31, 2025,*$190.4 million was drawn on the credit facilities. The Parent Company hadno other material commitments or contingencies during the reported periods.

NOTE3. SHARE CAPITAL

The Company's authorized common share capital is 250 million shares of common stock without nominal or par value. As of* December 31, 2025,and2024,* the number of outstanding shares of common stock was 11,111,453 and 11,014,655, respectively. The Parent Company issued 96,798,111,250, and 86,295 common stock during thetwelve months ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023*, respectively related to stock-based compensation. The Parent Company retired NIL common stock during each of thetwelve months ended* December 31, 2025*,* December 31, 2024* and* December 31, 2023*, related to stock options exercised.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons of behalf of the registrant and in the capacities and on the dates indicated.