On November 22, 2006, the shareholders of the Company approved the Company’s 2006 Equity Compensation Plan (the “2006 Plan”), which was amended and restated effective July 29, 2010 and which serves as a successor to the 1996 Plan. The 2006 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 the 2006 Plan is 1.25 million shares. The plan was amended to increase the number of shares set aside for issuance by an additional 0.475 million shares, 0.75 million shares and 1.53 million shares in October 2010, September 2015 and November 2020, respectively increasing the maximum to a total of 4.0 million shares. Generally, options issued under the 2006 Plan vest over a four-year period and have a term not exceeding seven years, except for automatic formula grants of non-qualified stock options, which vest after one year and have a five-year term. Prior to the September 2015 amendment to the 2006 Plan, automatic formula grants of non-qualified stock options vested immediately upon grant.

The Company's 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.


	Three Months Ended June 30, 2026			Three Months Ended June 30, 2025
	Number of shares	Weighted average exercise price per share		Number of shares	Weighted average exercise price per share

Outstanding, beginning of period	953,680	$	39.69	1,043,963	$	45.11
Granted	26,250	14.66		106,814	19.27
Exercised	-	-		-	-
Forfeited	(5,700)	22.65		(27,540)	22.60
Expired	(71,900)	62.40		(77,018)	63.17
Outstanding, end of period	902,330	37.26		1,046,219	39.82
Options exercisable, end of period	629,166	$	44.43	616,031	$	53.52


	Six Months Ended June 30, 2026			Six Months Ended June 30, 2025
	Number of shares	Weighted average exercise price per share		Number of shares	Weighted average exercise price per share

Outstanding, beginning of period	961,376	$	39.65	1,122,700	$	45.86
Granted	26,250	14.66		106,814	19.27
Exercised	-	-		-	-
Forfeited	(9,675)	22.38		(45,768)	29.83
Expired	(75,621)	61.78		(137,527)	61.91
Outstanding, end of period	902,330	37.26		1,046,219	39.82
Options exercisable, end of period	629,166	$	44.43	616,031	$	53.52


	Options outstanding						Options exercisable
Exercise price	Number outstanding	Weighted average exercise price per share		Weighted average remaining contractual life (years)	Aggregate intrinsic value		Number exercisable	Weighted average exercise price per share		Weighted average remaining contractual life (years)	Aggregate intrinsic value

$14.66 -$19.93	172,287	$	18.30	5.6	$	-	85,716	$	19.11	5.4	$	-
$20.25 - $28.37	362,489	22.70		4.8	-		177,646	23.30		4.5	-
$30.70 - $30.74	5,000	30.74		3.4	-		3,750	30.74		3.4	-
$40.04 - $48.00	127,465	42.00		3.0	-		126,965	42.01		3.0	-
$51.82 - $59.98	13,350	55.53		0.5	-		13,350	55.53		0.5	-
$60.01 - $68.41	77,116	60.01		0.9	-		77,116	60.01		0.9	-
$70.13 - $79.51	135,623	78.41		1.7	-		135,623	78.41		1.7	-
$80.61 - $82.07	9,000	80.61		2.3	-		9,000	80.61		2.3	-
	902,330	$	37.26	3.8	$	-	629,166	$	44.43	3.2	$	-

On November 9, 2022 the Board of Wavelo approved Wavelo's Equity Compensation Plan (“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. The maximum number of Wavelo common shares which have been set aside for issuance under the 2022 Plan is 20 million shares. In June 2024, the Board approved an increase in the authorized share count to 120 million shares, with a corresponding increase in the option pool to 25 million shares. The options issued under the ECP primarily vest over a period of three years and have a seven-year term. For the initial grants under the plan, the first 25% became exercisable within three months and vesting ratably monthly thereafter, after the third year. Compensation costs for awards of stock-based compensation settled in shares are determined based on the fair value of 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.


	Three Months Ended June 30, 2026			Three Months Ended June 30, 2025
	Number of shares	Weighted average exercise price per share		Number of shares	Weighted average exercise price per share

Outstanding, beginning of period	15,292,152	$	1.34	15,740,802	$	1.32
Granted	867,000	1.81		163,000	1.78
Exercised	-	-		(24,420)	1.27
Forfeited	(41,357)	1.60		(134,118)	1.57
Expired	(574,000)	1.27		(119,251)	1.67
Outstanding, end of period	15,543,795	1.37		15,626,013	1.33
Options exercisable, end of period	13,349,382	$	1.30	12,351,945	$	1.28


	Six Months Ended June 30, 2026			Six Months Ended June 30, 2025
	Number of shares	Weighted average exercise price per share		Number of shares	Weighted average exercise price per share

Outstanding, beginning of period	15,305,714	$	1.33	15,887,997	$	1.27
Granted	882,500	1.81		389,000	1.78
Exercised	-	-		(24,420)	1.27
Forfeited	(47,607)	1.56		(206,181)	1.53
Expired	(596,812)	1.27		(420,383)	1.29
Outstanding, end of period	15,543,795	1.37		15,626,013	1.33
Options exercisable, end of period	13,349,382	$	1.30	12,351,945	$	1.28


	Options outstanding						Options exercisable
Exercise price	Number outstanding	Weighted average exercise price per share		Weighted average remaining contractual life (years)	Aggregate intrinsic value		Number exercisable	Weighted average exercise price per share		Weighted average remaining contractual life (years)	Aggregate intrinsic value

$0 -$1.81	15,543,795	$	1.37	3.5	$	6,868	13,349,382	$	1.30	3.3	$	6,793
	15,543,795	$	1.37	3.5	$	6,868	13,349,382	$	1.30	3.3	$	6,793

On January 16, 2023, the Board of Ting 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 Ting ECP vest over a four-year period and have a term not 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 fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. As option-pricing models require the use of subjective assumptions, changes in these assumptions can materially affect the fair value of the options. Ting 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.


	Three Months Ended June 30, 2026			Three Months Ended June 30, 2025
	Number of shares	Weighted average exercise price per share		Number of shares	Weighted average exercise price per share

Outstanding, beginning of period	4,537,331	$	6.00	4,937,111	$	6.00
Granted	-	-		-	-
Exercised	-	-		-	-
Forfeited	(1,834)	6.00		-	6.00
Expired	(103,075)	6.00		(219,342)	6.00
Outstanding, end of period	4,432,422	6.00		4,717,769	6.00
Options exercisable, end of period	4,398,599	$	6.00	3,871,117	$	6.00


	Six Months Ended June 30, 2026			Six Months Ended June 30, 2025
	Number of shares	Weighted average exercise price per share		Number of shares	Weighted average exercise price per share

Outstanding, beginning of period	4,646,012	$	6.00	5,959,660	$	6.00
Granted	-	-		—	—
Exercised	-	-		-	-
Forfeited	(73,759)	6.00		(91,658)	6.00
Expired	(139,831)	6.00		(1,150,233)	6.00
Outstanding, end of period	4,432,422	6.00		4,717,769	6.00
Options exercisable, end of period	4,398,599	$	6.00	3,871,117	$	6.00


	Options outstanding						Options exercisable
Exercise price	Number outstanding	Weighted average exercise price per share		Weighted average remaining contractual life (years)	Aggregate intrinsic value		Number exercisable	Weighted average exercise price per share	Weighted average remaining contractual life (years)	Aggregate intrinsic value

$0 - $6.00	4,432,422	$	6.00	3.8	$	-	4,398,599	6.0	3.8	$	-
	4,432,422	$	6.00	3.8	$	-	4,398,599	6.0	3.8	$	-

The Company recorded total stock-based compensation expense of $1.2 million and $2.3 million for the three and six months ended June 30, 2026, respectively. The Company recorded total stock-based compensation expense of $1.4 million and $2.9 million for the three and six months ended June 30, 2025, respectively. The Company details of the stock-based compensation expense are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Company options	$	846	$	967	$	1,799	$	2,050
Wavelo options	120		453		268		895
Ting options	211		30		222		61
Capitalized stock based compensation	(13)		(65)		(31)		(116)
Total stock based compensation expense	$	1,164	$	1,385	$	2,258	$	2,890