TUCOWS FINANCIAL STATEMENTS, Q4 2002

Tucows Inc. Consolidated Balance Sheets (Dollar amounts in U.S. dollars)
		December 31, 2002		December 31, 2001
Assets
Current assets:
Cash and cash equivalents	$	8,844,829	$	4,814,189
Restricted cash (note 1)		937,500		-
Accounts receivable		338,697		817,990
Prepaid expenses and deposits		1,951,086		2,041,927
Prepaid domain name registry fees, current portion		11,145,187		10,034,413
Total current assets		23,217,299		17,708,519
Prepaid domain name registry fees, long term portion		3,700,340		2,599,962
Property and equipment		1,581,321		3,691,390
Investments		353,737		1,367,072
Intangible assets		-		222,222
Total assets	$	28,852,697	$	25,589,165
Liabilities and Stockholders' Deficiency
Current liabilities:
Accounts payable	$	1,605,630	$	1,958,744
Accrued liabilities		2,288,412		2,242,858
Customer deposits		1,957,657		1,951,336
Obligations under capital lease, current portion		-		58,772
Deferred revenue, current portion		18,431,100		18,444,280
Total current liabilities		24,282,799		24,655,990
Deferred revenue, long term portion		5,929,917		4,270,341
Obligations under capital lease, net of current portion		-		52,387
Stockholders' deficiency:
Preferred stock - no par value, 1,250,000 shares   authorized; none issued and outstanding		-		-
Common stock - no par value, 250,000,000 shares   authorized; 64,626,429 shares issued and   outstanding at December 31, 2002 and   December 31, 2001		8,540,687		8,540,687
Additional Paid-in Capital		49,992,129		49,992,129
Deferred stock–based compensation		(183,297)		(346,000)
Deficit		(59,709,538)		(61,576,369)
Total stockholders' deficiency		(1,360,019)		(3,389,553)
Total liabilities and stockholders' deficiency	$	$28,852,697	$	25,589,165
Note 1:
The Company has entered into a series of forward exchange contracts, whereby an amount of U.S.$375,000 is converted into Canadian dollars on a semi-monthly basis from June 2002 until the end of December 2003. As margin security against these Contracts, the Company placed $1,196,000 into secured term deposits, which mature on a monthly basis in line with the Contracts. The outstanding margin security in the amount of $937,500 is reflected as restricted cash on the balance sheet.

Tucows Inc. Consolidated Statements of Operations (Dollar amounts in U.S. dollars)
	Three months ended December 31,				Year ended December 31,
	2002		2001		2002		2001
Net revenues	$	8,760,374	$	9,809,800	$	37,046,375	$	31,589,759
Cost of revenues		5,462,628		6,605,707		23,107,871		21,105,790
Gross profit		3,297,746		3,204,093		13,938,504		10,483,969
Operating expenses:
Sales and marketing (*)		939,062		1,087,377		3,770,913		6,380,102
Technical operations and development		842,196		998,495		3,725,966		5,052,569
General and administrative(*)		1,032,431		1,162,881		4,263,025		4,012,969
Depreciation of property and equipment		402,249		740,906		2,675,836		3,202,948
Loss on write-off of property and equipment		-		130,000		-		130,000
Amortization of intangible assets		-		467,700		222,222		3,656,846
Write-down of intangible assets		-		1,325,378		-		1,325,378
(Gain) loss on change in fair value of forward     contracts		(140,199)		-		260,289		-
Total operating expenses		3,075,739		5,912,737		14,918,251		23,760,812
Income (loss) from operations		222,007		(2,708,644)		(979,747)		(13,276,843)
Other income (expenses)
Interest income (expense), net		41,893		21,264		102,057		(135,920)
Gain on disposal of Electric Library     subscription assets		1,121,480		-		1,846,717		-
Gain on disposal of Liberty Registry     Management Services Inc.		-		-		1,955,443		-
Loss on disposal of Eklektix Inc.		-		-		(44,304)		-
Write down of investment in bigchalk.com		-		-		(1,013,335)		-
Total other income (expenses)		1,163,373		21,264		2,846,578		(135,920)
Income (loss) before provision for income taxes		1,385,380		(2,687,380)		1,866,831		(13,412,763)
Provision for income taxes		-		-		-		-
Net income (loss) for the period	$	1,385,380	$	(2,687,380)	$	1,866,831	$	(13,412,763)
Basic and diluted earnings (loss) per share	$	0.02	$	(0.04)	$	0.03	$	(0.24)
Shares used in computing basic and diluted  earnings (loss) per common share		64,626,429		64,626,429		64,626,429		56,152,735
(*) Stock-based compensation has been included in operating expenses as follows:
Sales and marketing	$	27,708	$	27,708	$	109,926	$	109,926
General and administrative	$	13,303	$	13,304	$	52,777	$	52,778

Tucows Inc. Consolidated Statements of Cash Flows (Dollar amounts in U.S. dollars)
	Three months ended December 31,				Year ended December 31,
	2002		2001		2002		2001
Cash provided by (used in):
Operating activities:
Net Income (loss) for the period	$	1,385,380	$	(2,687,380)	$	1,866,831	$	(13,412,763)
Items not involving cash:		-		-
Depreciation of property and equipment		402,249		740,906		2,675,836		3,202,948
Amortization of intangible assets		-		467,700		222,222		3,656,846
(Gain) loss on change in fair         value of forward contracts		(140,199)		-		260,289		-
Write-down of intangible assets		-		1,325,378		-		1,325,378
Loss on write-off of property and        equipment		-		130,000		-		130,000
Write down of investment in bigchalk.com		-		-		1,013,335		-
Stock-based compensation		41,011		41,012		162,703		162,704
Gain on disposal of Electric        Library subscription assets		(1,121,480)		-		(1,846,717)		-
Gain on disposal of Liberty Registry        Management Services Inc.		-		-		(1,955,443)		-
Loss on write-off of Eklektix Inc.		-		-		44,304		-
Change in non-cash operating working capital:
Accounts receivable		35,338		782,508		306,951		57,847
Prepaid expenses and deposits		(314,026)		(176,546)		(80,272)		(633,035)
Prepaid domain name registry fees		(167,032)		(459,092)		(2,488,384)		(3,176,290)
Accounts payable		356,274		620		(15,669)		(1,235,193)
Accrued liabilities		(125,796)		(667,881)		(479,898)		(1,851,638)
Customer deposits		(63,540)		(579,812)		20,915		(198,850)
Deferred revenue		121,993		1,444,192		3,731,415		5,908,326
Cash provided by (used in)     operating activities		410,172		361,605		3,438,418		(6,063,720)
Financing activities:
Proceeds on issuance of promissory notes		-				-		2,500,000
Repayment of promissory note		-				-		(2,500,000)
Proceeds on rights issue		-		-		-		2,999,973
Proceeds recieved on exercise      of stock options		-		-		-		24,396
Repayments of obligations under     capital leases		-		(18,953)		(111,160)		(24,774)
Cash provided by (used in)     financing activities		-		(18,953)		(111,160)		2,999,595
Investing activities:
Additions to property and equipment		(235,741)		(563,051)		(844,508)		(2,871,575)
Increase in restricted cash- being margin      security against forward exchange      contracts		127,250		-		(937,500)		-
Net proceeds on disposal of Electric Library      subscription assets		1,121,480		-		1,577,129		-
Investment in Afilias Limited		-		-		-		(253,737)
Proceeds on disposal of Liberty Registry      Management Services Inc., net of cash      disposed		-		-		938,889		-
Proceeds on disposal of Eklektix Inc.,      net of cash disposed		-		-		(30,628)		-
Aquisition of Infonautics Inc.,      net of cash acquired		-		-		-		8,833,431
Cash provided by (used in) investing      activities		1,012,989		(563,051)		703,382		5,708,119
Increase in cash and cash equivalents		1,423,161		(220,399)		4,030,640		2,643,994
Cash and cash equivalents, beginning of  period		7,421,668		5,034,588		4,814,189		2,170,195
Cash and cash equivalents, end of period	$	8,844,829	$	4,814,189	$	8,844,829	$	4,814,189
Supplemental cash flow information:
Interest paid	$	1,081	$	39,968	$	25,013	$	221,368
Supplemental disclosure of non-cash investing  and financing activities:
Common stock issued on the      acquisition of Infonautics, Inc.	$	-	$	-	$	-	$	8,489,000
Value assigned to Infonautics, Inc.      outstanding option on acquisition of      Infonautics, Inc.	$	-	$	-	$	-	$	44,000
Promissory note receivable on disposal of      Electric Library subscription assets	$	-	$	-	$	1,121,480	$	-