10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to          

Commission File No. 001-35724

Alteva, Inc.

(Exact name of registrant as specified in its charter)

New York	14-1160510
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
400 Market Street, Suite 1100
Philadelphia, PA	19106
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone, including area code:   (877) 258-3722

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES x    NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES x   NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act.  YES o    NO x

The number of shares of Alteva, Inc. common stock outstanding as of November 5, 2015 was 5,981,352.

Index to Form 10-Q

Part I	Financial Information
Item 1.	Financial Statements
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014 (unaudited)	4
	Condensed Consolidated Balance Sheets as of September 30, 2015 (unaudited) and December 31, 2014	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23
Item 4.	Controls and Procedures	23
Part II	Other Information
Item 1A.	Risk Factors	23
Item 6.	Exhibits	25

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Part I — Financial Information

Item 1.  Financial Statements

ALTEVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Operating revenues:
Unified Communications	$	4,718		$	4,308		$	13,703		$	12,753
Telephone	3,252			3,263			9,915			9,946
Total operating revenues	7,970			7,571			23,618			22,699
Operating expenses:
Cost of services and products (exclusive of depreciation and amortization expense)	3,201			2,924			9,687			8,843
Selling, general and administrative expenses	6,015			4,726			16,664			15,686
Depreciation and amortization	891			931			3,383			2,753
Restructuring costs and other special charges	—			600			—			700
Total operating expenses	10,107			9,181			29,734			27,982
Operating loss	(2,137		)	(1,610		)	(6,116		)	(5,283		)
Other income:
Interest (expense) income, net	(2		)	20			10			(173		)
Income from investment	—			—			—			52,373
Other income (expense), net	25			(4		)	1,515			23
Total other income, net	23			16			1,525			52,223
(Loss) income before income taxes	(2,114		)	(1,594		)	(4,591		)	46,940
Income tax (benefit) expense	(296		)	(264		)	(753		)	16,982
Net (loss) income	(1,818		)	(1,330		)	(3,838		)	29,958
Preferred dividends	6			6			19			19
Net (loss) income applicable to common stock	$	(1,824	)	$	(1,336	)	$	(3,857	)	$	29,939
Basic (loss) earnings per common share	$	(0.31	)	$	(0.23	)	$	(0.66	)	$	4.96
Diluted (loss) earnings per common share	$	(0.31	)	$	(0.23	)	$	(0.66	)	$	4.96
Weighted average shares of common stock used to calculate loss per common share:
Basic	5,871			5,826			5,853			5,802
Diluted	5,871			5,826			5,853			5,802
Dividends declared per common share	$	—		$	—		$	2.60		$	—

Please see accompanying notes, which are an integral part of the condensed consolidated financial statements.

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ALTEVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Net (loss) income	$	(1,818	)	$	(1,330	)	$	(3,838	)	$	29,958
Other comprehensive income:
Defined benefit pension plans:
Amortization of prior service costs	3			(35		)	8			(105		)
Amortization of actuarial loss	258			148			774			515
Other comprehensive income	261			113			782			410
Comprehensive (loss) income	$	(1,557	)	$	(1,217	)	$	(3,056	)	$	30,368

Please see accompanying notes, which are an integral part of the condensed consolidated financial statements.

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ALTEVA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30,			December 31,
	2015			2014
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	6,471		$	24,047
Trade accounts receivable - net of allowance for uncollectibles - $421 and $402 at September 30, 2015 and December 31, 2014, respectively	2,919			2,737
Other accounts receivable	598			488
Materials and supplies	273			167
Prepaid expenses	703			349
Prepaid income taxes	498			311
Receivable and deferred income taxes	1,190			43
Total current assets	12,652			28,142
Property, plant and equipment, net	11,050			12,384
Intangibles, net	4,382			5,020
Seat licenses, net	1,537			1,543
Goodwill	9,006			9,006
Other assets	1,474			1,023
Total assets	$	40,101		$	57,118
Liabilities and shareholders’ equity
Current liabilities
Short-term debt	$	405		$	325
Accounts payable	1,317			1,216
Advance billing and payments	317			274
Accrued taxes	947			1,056
Pension and post retirement benefit obligations	276			276
Accrued wages	914			1,036
Deferred revenue	857			705
Other accrued expenses	2,792			2,180
Total current liabilities	7,825			7,068
Long-term debt	403			295
Payable and deferred income taxes	1,008			766
Pension and postretirement benefit obligations	8,826			8,833
Total liabilities	18,062			16,962
Shareholders’ equity
Preferred shares - $100 par value, authorized and issued shares of 5; $0.01 par value, authorized and unissued shares of 10,000	500			500
Common stock - $0.01 par value, authorized shares of 10,000; issued shares of 6,903 and 6,826 at September 30, 2015 and December 31, 2014, respectively	69			69
Treasury stock - at cost, 902 and 885 common shares at September 30, 2015 and December 31, 2014, respectively	(8,202		)	(8,077		)
Additional paid in capital	14,731			14,047
Accumulated other comprehensive loss	(3,215		)	(3,997		)
Retained earnings	18,156			37,614
Total shareholders’ equity	22,039			40,156
Total liabilities and shareholders’ equity	$	40,101		$	57,118

Please see accompanying notes, which are an integral part of the condensed consolidated financial statements.

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ALTEVA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Nine Months Ended September 30,
	2015			2014
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income	$	(3,838	)	$	29,958
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	3,383			2,753
Stock based compensation expense	684			677
Distribution in excess of equity in earnings and gain on sale from equity investment	—			(49,776		)
Other non-cash operating activities	(958		)	230
Changes in assets and liabilities:
Trade accounts receivable	(182		)	(269		)
Prepaid expenses and other assets	(1,204		)	(272		)
Accounts payable and accrued expenses	1,022			922
Accrued taxes	(109		)	4,029
Pension and postretirement benefit obligations	775			139
Net cash used in operating activities	(427		)	(11,609		)
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures	(688		)	(222		)
Purchase of seat licenses and other intangibles	(353		)	(115		)
Proceeds from sale of assets	—			33
Proceeds received in excess of income from equity investments	—			49,776
Net cash (used in) provided by investing activities	(1,041		)	49,472
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from debt	—			2,443
Repayment of debt and capital leases	(363		)	(12,575		)
Purchase of treasury stock	(125		)	(399		)
Dividends (Common and Preferred)	(15,620		)	(19		)
Net cash used in financing activities	(16,108		)	(10,550		)
Net change in cash and cash equivalents	(17,576		)	27,313
Cash and cash equivalents at beginning of period	24,047			1,636
Cash and cash equivalents at end of period	$	6,471		$	28,949
Supplemental disclosure of non-cash investing activities:
Acquisition of equipment and seat licenses under capital leases	$	368		$	390
Seat licenses acquired but not paid	$	—		$	188

Please see the accompanying notes, which are an integral part of the condensed consolidated financial statements.

6

ALTEVA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:   NATURE OF OPERATIONS AND CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Nature of Operations

Alteva, Inc. (“Alteva” or the “Company”) is a cloud-based communications company that provides Unified Communications (“UC”) solutions, including enterprise hosted Voice over Internet Protocol (“VoIP”) and operates as a regional Incumbent Local Exchange Carrier (“ILEC”) in southern Orange County, New York and northern New Jersey.  Unless otherwise indicated or unless the context requires, all references to the Company means the Company and its wholly-owned subsidiaries.  The Company delivers cloud-based UC solutions including BroadSoft-based VoIP integrated with Microsoft Lync, Microsoft Exchange, Google Apps for Business, leading customer relationship management (“CRM”) applications such as Salesforce.com and Bring-Your-Own-Device (“BYOD”) solutions for Mobility, which allows users to take advantage of all of the features available to them no matter where they are located or what device they are using.  The Company’s ILEC operations consist of providing local and toll telephone service to residential and business customers, Internet high-speed broadband service, and satellite television services provided by DIRECTV®.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information, with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements.  In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.  The operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year or any other future period.  The consolidated balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.  All material intercompany transactions and balances have been eliminated.  The interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period.  Significant estimates include, but are not limited to, depreciation and amortization expense, allowance for doubtful accounts, long-lived assets, pension and postretirement expenses, and income taxes.  Actual results could differ from those estimates.

Revenue Recognition

The Company derives its revenue from the sale of UC services as well as traditional telephone services.

The Company recognizes revenue when (i) persuasive evidence of an arrangement between the Company and the customer exists, (ii) the delivery of the product to the customer has occurred or service has been provided to the customer, (iii) the price to the customer is fixed or determinable, and (iv) collectability of the sales or service price is reasonably assured.  Revenue is reported net of all applicable sales tax.

UC

The Company’s UC services and solutions consist primarily of its hosted VoIP UC system, certain UC applications, and other professional services associated with the installation and activation. Additionally, the Company offers customers the ability to purchase telephone equipment from the Company directly or independently from external vendors.

Multiple element arrangements primarily include the sale of telephone equipment, along with professional services associated with installation, activation and implementation services, as well as follow on hosting services.  The Company has concluded that the separate units of accounting in these arrangements consist of (i) the telephone equipment sale and (ii) the professional services provided combined with the follow on hosting services.  The professional services provided do not constitute a separate unit of accounting as they do not have value to the customer on a stand-alone basis.  Arrangement consideration is allocated to the separate units of accounting based on the relative selling price.  The selling price for telephone equipment is based on third-party evidence representing list prices for similar equipment when sold a stand-alone basis.  The selling price for professional and hosting services is based on the Company’s best estimate of selling price (“BESP”).  The Company develops its BESP by considering pricing practices, margin, competition and overall market trends.

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The Company bills a portion of its monthly recurring hosted service revenue a month in advance. Any amounts billed and collected, but for which the service is not yet delivered, are included in deferred revenue. These amounts are recognized as revenues only when the service is delivered.

Equipment sales associated with the sale of telephone equipment is recognized upon delivery to the customer, as it is considered to be a separate earnings process. The sales are recognized on a gross basis, as the Company is considered the primary obligor in customer transactions among other considerations.  Other upfront fees, excluding equipment, along with associated costs, up to but not exceeding these fees, are deferred and recognized over the estimated life of the customer relationship.  The Company has estimated its customer relationship life at eight years and evaluates it periodically for continued appropriateness.

Telephone

Revenue is earned from monthly billings to customers for local voice services, long distance, DSL, Internet services, hardware and other services. Revenue is also derived from charges for network access to the local exchange telephone network from subscriber line charges and from contractual arrangements for services such as billing and collection and directory advertising. Revenue is recognized in the period in which service is provided to the customer. Directory advertising revenue is recorded ratably over the life of the directory. With multiple billing cycles, the Company accrues revenue earned but not yet billed at the end of a quarter. The Company also defers services billed in advance and recognizes them as income when earned.

The Telephone segment markets competitive service bundles which may include multiple deliverables. The base bundles consist of voice services (including a business or residential phone line), calling features and long distance services and customers may choose to add internet services to a base bundle package. Separate units of accounting within the bundled packages include voice services, long distance and Internet services. Revenue for all services included in bundles is recognized over the same service period, which is the time period in which the service is provided to the customer.

Certain revenue is realized under pooling arrangements with other service providers and is divided among the companies based on respective costs and investments to provide the services. The companies that take part in pooling arrangements may adjust their costs and investments for a period of two years, which causes the funds distributed by the pool to be adjusted retroactively. The Company believes that recorded amounts represent reasonable estimates of the final distribution from these pools. However, to the extent that the companies participating in these pools make adjustments, there will be corresponding adjustments to the Company’s recorded revenue in future periods.

Revenue from these pooling arrangements which includes Universal Service Funds (“USF”) and National Exchange Carrier Association (“NECA”) pool settlements, accounted for 5% and 3% of the Company’s consolidated revenues for the nine months ended September 30, 2015 and 2014, respectively.

Materials and Supplies

The Company’s materials and supplies are carried at average cost, net of reserves for obsolescence, and consist principally of telephone equipment, telephone pole and wiring spare parts and other ancillary equipment for resale.

Fair Value

Fair value is the estimated price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company is required by accounting standards to provide the disclosure framework for measuring fair value and expanded disclosure about fair value measurements.  Fair value measurements are classified and disclosed in one of the following categories:

Level 1:	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:	These are inputs, other than quoted prices that are included in Level 1, which are observable in the marketplace throughout the term of the assets or liabilities, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.
Level 3:	Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.  The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

8

Goodwill

Goodwill represents the excess of the purchase price of an acquired business over the net fair value of identifiable assets acquired and liabilities assumed.  Goodwill is not amortized, but rather is assessed for impairment at least annually.  The Company tests goodwill for impairment at the reporting unit level annually on December 31, or whenever events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.  If it is determined that an impairment has occurred, the Company records a write down of the carrying value and records the charge for the impairment as an operating expense during the period in which the determination is made.  The Company has determined that its operating segments are the applicable reporting units because they are the lowest level at which discrete, reliable financial and cash flow information is regularly reviewed by segment management.

The Company only has goodwill that is associated with its UC segment, resulting from the purchase of certain assets and certain liabilities of Alteva, LLC in 2011.  The Company is not aware of any events or circumstances that occurred during the nine months ended September 30, 2015 that would have more likely than not reduced the fair value of this reporting unit below its carrying value.

Income Taxes

The Company records deferred taxes that arise from temporary differences between the financial statement and the tax basis of assets and liabilities.  Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate.  Deferred tax assets and deferred tax liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.  The Company’s deferred taxes result principally from differences in the timing of depreciation, in the accounting for pensions and other postretirement benefits, and state net operating loss carryforwards.

The process of providing for income taxes and determining the related balance sheet accounts requires management to assess uncertainties, make judgments regarding outcomes and utilize estimates. Management must make judgments currently about such uncertainties and determine estimates of the Company’s tax assets and liabilities. To the extent the final outcome differs, future adjustments to the Company’s tax assets and liabilities may be necessary.

The Company assesses the realizability of its deferred tax assets, taking into consideration future reversals of existing temporary differences, the Company’s forecast of future taxable income, and available tax planning strategies that could be implemented to realize the deferred tax assets. Based on this assessment, management must evaluate the need for, and the amount of, valuation allowances against the Company’s deferred tax assets. To the extent facts and circumstances change in the future, adjustments to the valuation allowances may be required.

Accounting for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be paid within one year.  The Company recognizes interest accrued related to unrecognized tax benefits in interest expense.

Stock-Based Compensation

The Company measures the cost of employee services received in exchange for the award of an equity instrument based on the grant-date fair value of the award, with such cost recognized over the applicable vesting period.

Accounting Policies

There were no material changes to the Company’s other accounting policies as presented in Item 8 of its Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

NOTE 2:  NEW ACCOUNTING PRONOUNCEMENTS

In May 2015, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), followed in July by ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965): Part (I) Fully Benefit-Responsive Investment Contracts, Part (II) Plan Investment Disclosures, Part (III) Measurement Date Practical Expedient. These ASUs simplify or eliminate some of the financial statement reporting and disclosures that were previously required for employee benefit plans. ASU 2015-07 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years and requires retrospective presentation.  Parts I and II of ASU 2015-12 are effective for fiscal years beginning after December 15, 2015, and require retrospective presentation.  The Company expects the adoption of these standards will affect its employee benefit plan disclosures.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs.  The update provides guidance on simplifying the presentation for debt issuance costs and debt discount and premium. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2015.  The Company does not expect the adoption of ASU 2015-03 to have a significant impact to the disclosure or balance sheet presentation in its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements — Going Concern: Disclosure of

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Uncertainties about an Entity’s Ability to Continue as a Going Concern.  The update provides guidance that previously did not exist under US GAAP about a company’s management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures, if applicable.  The standard is effective for annual and interim periods within those annual periods beginning after December 15, 2016.  Early adoption is permitted. The Company does not expect the adoption of ASU 2014-15 to have a significant impact to the disclosures in its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period.  The update provides guidance on how to account for certain share-based payment awards where employees would be eligible to vest in the award regardless of whether the employee is still rendering service on the date the performance target is achieved.  The standard is effective for annual and interim periods within those annual periods beginning after December 15, 2015.  Early adoption is permitted.  The Company does not expect the adoption of ASU 2014-12 to have a material impact to its consolidated results of operations.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 to supersede nearly all existing revenue recognition guidance under U.S. GAAP.  The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services.  ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP.  The guidance was originally effective for annual reporting periods beginning after December 15, 2016, and interim periods therein. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to annual reporting periods beginning after December 15, 2017. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. ASU 2014-09 can be adopted using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements and has not yet selected a transition method nor has it selected an adoption date.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 revised guidance to only allow disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity’s operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations, as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. ASU 2014-08 is effective for interim and annual reporting periods beginning after December 15, 2014. The Company adopted ASU 2014-08 effective January 1, 2015 and the adoption did not have a significant impact on the Company’s consolidated financial statement presentation.

NOTE 3:  SEAT LICENSES AND OTHER INTANGIBLE ASSETS

Intangible assets with finite lives are amortized over their respective estimated useful lives to their estimated residual value. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

The components of seat licenses are as follows:

	Estimated	Gross		Accumulated			Net
($ in thousands)	Useful Lives	Value		Amortization			Value
As of September 30, 2015
Seat licenses	5 years	$	3,399	$	(1,862	)	$	1,537

	Estimated	Gross		Accumulated			Net
($ in thousands)	Useful Lives	Value		Amortization			Value
As of December 31, 2014
Seat licenses	5 years	$	2,936	$	(1,393	)	$	1,543

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The components of other intangible assets are as follows:

	Estimated	Gross		Accumulated			Net
($ in thousands)	Useful Lives	Value		Amortization			Value
As of September 30, 2015
Customer relationships	8 years	$	5,400	$	(2,812	)	$	2,588
Trade name	15 years	2,400		(667		)	1,733
Website	12 years	95		(34		)	61
Total		$	7,895	$	(3,513	)	$	4,382
	Estimated	Gross		Accumulated			Net
($ in thousands)	Useful Lives	Value		Amortization			Value
As of December 31, 2014
Customer relationships	8 years	$	5,400	$	(2,306	)	$	3,094
Trade name	15 years	2,400		(547		)	1,853
Website	12 years	95		(22		)	73
Total		$	7,895	$	(2,875	)	$	5,020

NOTE 4:  ORANGE COUNTY-POUGHKEEPSIE LIMITED PARTNERSHIP

The Company was a limited partner in the Orange County-Poughkeepsie Limited Partnership (“O-P”) and had an 8.108% limited partnership interest in the O-P until April 30, 2014, which was accounted for under the equity method of accounting.  The majority owner and general partner of the O-P is Verizon Wireless of the East LP (“Verizon”).

On April 30, 2014, the Company exercised the Put option and sold all of its ownership interest in the O-P for gross proceeds of $50 million, which resulted in a gain on the sale of $49.8 million.  The Company did not receive any income from the O-P after April 30, 2014.  The Company used a portion of the proceeds to repay all of the then outstanding borrowings under the TriState credit facility, paid taxes on the gain and fund a special dividend paid in this quarter. The Company expects to use the remaining gross proceeds, among other things, for working capital needs and support growth initiatives. The Company may, in its discretion, use the gross proceeds for other purposes.

Pursuant to the equity method accounting of the Company’s investment income, the Company is required to record the income from the O-P as an increase to the Company’s investment account.  On May 26, 2011, the Company entered into an agreement (the “4G Agreement”) with Verizon and Cellco Partnership (d/b/a Verizon Wireless), the other limited partner, in the O-P to make certain changes to the O-P partnership agreement.  The 4G Agreement provided for guaranteed annual cash distributions to the Company through 2013.  The Company was therefore required to apply the cash payments made as a return on its investment when received.   As a result of receiving the fixed guaranteed cash distributions from the O-P in excess of the Company’s proportionate share of the O-P income, the investment account was reduced to zero during 2012. Thereafter, the Company recorded the fixed guaranteed cash distributions that were received from the O-P in excess of the proportionate share of the O-P income directly to the Company’s statement of operations as other income.  In 2014 when the guaranteed distribution ceased, the Company returned to recording the income from the O-P as in increase to the Company’s investment account and any cash payments received were applied as a return on its investment.  As of September 30, 2015 and December 31, 2014, the investment account was zero.

The following summarizes the income statement (unaudited) for the nine months ended September 30, 2014:

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	For the nine months ended
($ in thousands)	September 30, 2014
Net sales	$	170,746
Cellular service cost	80,051
Operating expenses	44,726
Operating income	45,969
Other income	62
Net income	$	46,031
Company’s share	$	2,597

NOTE 5: DEBT OBLIGATIONS

Debt obligations consisted of the following at September 30, 2015 and December 31, 2014:

	As of
($ in thousands)	September 30, 2015		December 31, 2014
Short-term debt:
Capital leases and other borrowings, current portion	$	405	$	325
Long-term debt:
Capital leases and other borrowings	403		295
Total debt obligations	$	808	$	620

On November 7, 2014, the Company entered into a demand line of credit with TriState (the “Demand Line of Credit”) to allow for borrowings up to $5.0 million. The Company borrows or repays its debt as needed based upon its working capital obligations.  It is up to the discretion of TriState to approve borrowings within the allowed line of credit limit and TriState may, at any time, demand that the Company make payment on an outstanding balance. There are no financial covenants under the Demand Line of Credit.  As of September 30, 2015, the Company did not have any outstanding balance under the Demand Line of Credit.

NOTE 6:  INCOME TAXES

The effective tax rate for the nine months ended September 30, 2015, and September 30, 2014 was 16% and 36%, respectively.  We determined our interim tax provision by developing an estimate of the annual effective tax rate and applying such rate to interim pre-tax results. The estimated rate includes projections of tax expense on the expected increase in our valuation allowance for deferred tax assets.  The estimated effective tax rate differed from the U.S. statutory rate primarily due to the expected increase in the valuation allowance, which reduced the overall tax benefit recorded for the period ended September 30, 2015.

As of September 30, 2015 and December 31, 2014, the Company carried a full valuation allowance against its deferred tax assets because management determined that it was not more likely than not that it would realize the benefits of such deferred tax assets. The Company maintains a deferred tax liability related to indefinite lived intangibles.

Accounting for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be paid within one year.  The Company has concluded that there are no material uncertain tax positions requiring recognition in its consolidated financial statements as of September 30, 2015 and December 31, 2014.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense. For the nine months ended September 30, 2015 and 2014, the interest expense relating to unrecognized tax benefits was not material.

The Company and its subsidiaries file a U.S. federal consolidated income tax return.  The U.S. federal statute of limitations remains open for the years 2011 and thereafter. State income tax returns are generally subject to examination for a period of 3 to 5 years after filing the respective return.  The impact of any federal changes on state returns remains subject to examination by the relevant states for a period of up to one year after formal notification to the states.

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NOTE 7:  PENSION AND POSTRETIREMENT OBLIGATIONS

The components of net periodic cost (benefit) for the three months ended September 30, 2015 and 2014 are as follows:

	Pension Benefits						Postretirement Benefits
	For the three months ended						For the three months ended
($ in thousands)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Interest cost	$	195		$	191		$	24		$	30
Expected return on plan assets	(195		)	(228		)	7			(6		)
Amortization of prior service cost	14			14			(11		)	(49		)
Recognized actuarial loss	237			142			21			6
Net periodic benefit cost (benefit)	$	251		$	119		$	41		$	(19	)

The components of net periodic cost (benefit) for the nine months ended September 30, 2015 and 2014 are as follows:

	Pension Benefits						Postretirement Benefits
	For the nine months ended						For the nine months ended
($ in thousands)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Interest cost	$	586		$	604		$	73		$	89
Expected return on plan assets	(586		)	(669		)	21			(15		)
Amortization of prior service cost	42			42			(34		)	(147		)
Recognized actuarial loss	711			497			63			18
Net periodic benefit cost (benefit)	$	753		$	474		$	123		$	(55	)

For the nine months ended September 30, 2015 and September 30, 2014, the Company has contributed $0.1 million and $0.2 million, respectively, to its pension and postretirement benefits plans. The amortization of prior service cost and recognized actuarial loss included in pension and postretirement expense represent reclassifications out of other comprehensive income (loss).

NOTE 8:    STOCK BASED COMPENSATION

The Company has a shareholder approved long-term incentive plan (the “LTIP”) to assist the Company and its affiliates in attracting, motivating and retaining selected individuals to serve as employees, directors, consultants and advisors of the Company and its affiliates by providing incentives to such individuals through the ownership and performance of the Company’s common stock. There are 1.1 million shares of common stock authorized for issuance under the LTIP.  Shares available for grant under the LTIP may be authorized and unissued shares or shares that have been reacquired by the Company and are designated as treasury shares. As of September 30, 2015 and December 31, 2014, 382,198 and 420,392 shares of the Company’s common stock were available for grant under the LTIP. The LTIP permits the issuance by the Company of awards in the form of stock options, stock appreciation rights, restricted stock and restricted stock units and performance shares. The exercise price per share of the Company’s common stock purchasable under any stock option or stock appreciation right may not be less than 100% of the fair market value of one share of common stock on the date of grant. The term of any stock option or stock appreciation right may not exceed ten years. The LTIP also provides plan participants with a cashless mechanism to exercise their stock options. Issued restricted stock, stock options and restricted stock units are subject to vesting restrictions.

On August 21, 2015, the Compensation Committee of the Board of Directors of the Company (the “Committee”) approved amendments to the vesting terms of unvested equity grants for all employees with outstanding grants under the LTIP.  All existing employee equity grant award agreements were amended to provide that all such awards vest immediately upon a change in control of the Company. On the same day, the Committee took further action so that all awarded, but unvested restricted stock of non-employee directors vested effective as of the close of business on Monday, August 24, 2015. As a result of these two changes, the Company recorded an additional $0.2 million in compensation expense during the third quarter of 2015 relating to the accelerated vesting for the three and nine months ended September 30, 2015.

Restricted Stock Awards

Stock-based compensation expense for restricted stock awards was $0.7 million and $0.7 million for the nine months ended September 30, 2015 and 2014, respectively, and was recorded within selling, general, and administrative expenses.

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Restricted stock awards are amortized over their respective vesting periods of two or three years.  The Company records stock-based compensation for grants of restricted stock awards on a straight-line basis.

The following table summarizes the restricted common stock activity for the nine months ended September 30, 2015:

	For the nine months ended
	September 30, 2015
	Shares		Weighted Average Fair Value
Balance - nonvested at December 31, 2014	124,578		$	9.84
Granted	80,452		7.37
Vested	(91,262	)	9.27
Forfeited	(3,365	)	9.94
Balance - nonvested at September 30, 2015	110,403		$	8.52

The total grant-date fair value of restricted stock vested for the nine months ended September 30, 2015 was $0.8 million.  As of September 30, 2015, $0.6 million of total unrecognized compensation expense related to restricted common stock is expected to be recognized over a weighted average period of approximately 2.0 years.

Stock Options

The following tables summarize stock option activity for the nine months ended September 30, 2015, along with stock options exercisable at the end of the period:

	For the nine months ended
	September 30, 2015
Options	Shares		Weighted Average Exercise Price		Weighted Average Contractual Life (Years)
Outstanding - Beginning of period	327,003		$	12.18
Forfeited or expired	(22,655	)	11.02
Outstanding - End of period	304,348		$	12.26	6.11
Vested and Expected to Vest at September 30, 2015	295,218
Exercisable at September 30, 2015	260,555

The fair value of the stock-based awards was estimated using the Black-Scholes model.  No options were granted during the nine months ended September 30, 2015.

As of September 30, 2015, the amount of unrecognized compensation expense related to stock options awards was de minimis.

Stock-based compensation expense resulting from stock options granted to employees was de minimis for the nine months ended September 30, 2015 and 2014 and was recorded within selling, general, and administrative expenses.

Shareholder Rights Plan

On September 2, 2014, in connection with an unsolicited, non-binding acquisition proposal, the Company’s Board of Directors (the “Alteva Board”) adopted a Stockholder Rights Plan that provides for the distribution of one right for each share of common stock outstanding.  Each right entitles the holder to purchase one one-thousandth (1/1000th) of a share of Series A Junior Participating Preferred Stock, par value of $0.01 per share, of the Company (the “Preferred Stock”) at a price of $22.20 per one-thousandth of a share of Preferred Stock, subject to adjustment.  The rights generally become distributed and exercisable at the discretion of the Alteva Board following a public announcement that 20% or more of the Company’s common stock has been acquired or an intent to acquire has become apparent.  By its terms, the Stockholder Rights Plan expired on September 1, 2015.

Share Repurchase Program

On August 25, 2014, the Alteva Board authorized a repurchase program for up to $3.0 million of its common stock.  Share purchases may take place in open market transactions or in privately negotiated transaction and may be made from time to time depending on market conditions, share price, trading volume and other factors. The repurchase program authorized by the Alteva Board does not require the Company to acquire a specific number of shares, and may be terminated, suspended, or

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modified at any time. The timing and actual number of shares repurchased, if any, will depend on a variety of factors including the market price of the Company’s common stock, regulatory, legal and contractual requirements, and other market factors. The share repurchase is expected to be funded from available cash on hand.

On May 14, 2015, the stock repurchase program was terminated by the Company’s Board of Directors in connection with approving the special cash dividend of $2.60 per outstanding common share (see Note 10).

As of September 30, 2015, the Company repurchased 11,057 shares under the repurchase program at a value of $0.1 million.  Shares were purchased on the open market at the prevailing days’ stock price, plus transaction costs.

NOTE 9:  EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings (loss) per share is computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of common stock adjusted to include the effect of potentially dilutive securities.  Potentially dilutive securities include incremental shares issuable upon exercise of outstanding stock options and shares of unvested restricted stock.  Diluted earnings (loss) per share exclude all dilutive securities if their effect is anti-dilutive.

The Company’s restricted stock awards are considered “participating securities” because they contain non-forfeitable rights to dividends. Under the two-class method, earnings per share (“EPS”) is computed by dividing earnings allocated to common shareholders by the weighted-average number of common shares outstanding for the period. In applying the two-class method, earnings are allocated to both shares of common stock and participating securities based on their respective weighted-average shares outstanding for the period.

For the three and nine months ended September 30, 2015, the Company experienced a net loss.  As a result, the effect of participating securities was excluded from the computation of basic and diluted EPS.  The net losses were not allocated because the restricted stockholders are not required to fund losses.

The weighted average number of shares of common stock used in basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014 was as follows:

	For the three months ended September 30,
(amounts in thousands, except for per share)	2015			2014
NUMERATOR:
Net loss applicable to common stock before participating securities	$	(1,824	)	$	(1,336	)
Less: income applicable to participating securities (1)	—			—
Net loss applicable to common stock	$	(1,824	)	$	(1,336	)
DENOMINATOR:
Weighted average shares outstanding - Basic and Diluted (2)	5,871			5,826
EPS:
Net loss per share - Basic and Diluted	$	(0.31	)	$	(0.23	)

(1)For the three months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities.  As the participating securities do not participate in losses, there was no allocation of loss for the three months ended September 30, 2015 and 2014.

(2)For the three months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

	For the nine months ended September 30,
(amounts in thousands, except for per share)	2015			2014
NUMERATOR:
Net (loss) income applicable to common stock before participating securities	$	(3,857	)	$	29,939
Less: income applicable to participating securities (1)	—			(1,174		)
Net (loss) income applicable to common stock	$	(3,857	)	$	28,765
DENOMINATOR:
Weighted average shares outstanding - Basic and Diluted (2)	5,853			5,802
EPS:
Net (loss) income per share - Basic and Diluted	$	(0.66	)	$	4.96

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(1)For the nine months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities.  As the participating securities do not participate in losses, there was no allocation of loss for the nine months ended September 30, 2015.

(2)For the nine months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

NOTE 10:  SHAREHOLDERS’ EQUITY

A summary of the changes to shareholders’ equity for the nine months ended September 30, 2015 and 2014 is provided below:

	For the nine months ended September 30,
($ in thousands)	2015			2014
Shareholders’ equity, beginning of period	$	40,156		$	13,006
Net (loss) income	(3,838		)	29,958
Dividends paid on common stock	(15,601		)	—
Dividends paid on preferred stock	(19		)	(19		)
Stock based compensation	684			677
Treasury stock purchases	(125		)	(399		)
Changes in pension and postretirement benefit plans	782			410
Shareholders’ equity, end of period	$	22,039		$	43,633

Special Cash Dividend

On May 14, 2015, the Company’s Board of Directors authorized and declared a special cash dividend of $2.60 on each common share.

The record date for the special cash dividend was June 19, 2015, and the payment date for the dividend was June 30, 2015. At $2.60 per share, the special cash dividend represented approximately 36.0% of the Company’s closing stock price on May 14, 2015. Pursuant to NYSE MKT policy, when a dividend is declared in a per share amount that exceeds 20% of a company’s stock price, the date on which that company’s shares will begin to trade without the dividend, or ex-dividend, is the first business day following the payable date. The ex-dividend date as set by NYSE MKT was July 1, 2015, the first business day following the payable date for the special cash dividend. Shareholders of record on the record date who sold their shares of the Company’s common stock prior to July 1, 2015 were required by the NYSE MKT to give the purchaser of those shares of the Company’s common stock a due bill, covering the amount of the dividend, to be redeemed on the date fixed by the NYSE MKT.

NOTE 11:  SEGMENT INFORMATION

The Company’s two segments, UC and Telephone, are strategic business units that offer different products and services.  The Company evaluates the performance of its two segments based upon factors such as revenue growth, expense containment, market share and operating results.

The UC segment is a premier provider of hosted Unified Communications as a Service (UCaaS) including VoIP, hosted Microsoft communication services, fixed mobile convergence and advanced voice applications for a broad customer base including, medium and large-sized businesses and enterprise business customers.

The Telephone segment operates as an ILEC in southern Orange County, New York and northern New Jersey.  The Telephone segment consists of providing local and toll telephone service, high-speed broadband and fiber Internet access services and satellite video services to residential and business customers.  The ILEC service areas are primarily rural and have an estimated population of 50,000.  We also operate as a CLEC in Middletown, New York, Scotchtown, New York and Vernon, New Jersey.

The segment results presented below are not necessarily indicative of the results of operations these segments would have achieved had they operated as stand-alone entities during the periods presented.  All intersegment transactions are shown net of eliminations.

Segment statement of operations information for the three months ended September 30, 2015 and 2014 is set forth below:

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	For the three months ended September 30,
	2015									2014
	UC			Telephone			Consolidated			UC			Telephone			Consolidated
Operating Revenues	$	4,718		$	3,252		$	7,970		$	4,308		$	3,263		$	7,571
Operating Expenses
Cost of services and products	2,268			933			3,201			1,923			1,001			2,924
Selling, general and administrative expense	3,624			2,391			6,015			3,048			1,678			4,726
Loss on disposal, restructuring costs and other special charges	—			—			—			336			264			600
Depreciation and amortization	529			362			891			546			385			931
Total Operating Expenses	6,421			3,686			10,107			5,853			3,328			9,181
Operating Loss	(1,703		)	(434		)	(2,137		)	(1,545		)	(65		)	(1,610		)
Interest income (expense), net							(2		)							20
Other income (expense), net							25									(4		)
Loss before income taxes							$	(2,114	)							$	(1,594	)

Segment statement of operations information for the nine months ended September 30, 2015 and 2014 is set forth below:

	For the nine months ended September 30,
	2015									2014
	UC			Telephone			Consolidated			UC			Telephone			Consolidated
Operating Revenues	$	13,703		$	9,915		$	23,618		$	12,753		$	9,946		$	22,699
Operating Expenses
Cost of services and products	6,769			2,918			9,687			5,838			3,005			8,843
Selling, general and administrative expense	10,361			6,303			16,664			10,059			5,627			15,686
Loss on disposal, restructuring costs and other special charges	—			—			—			392			308			700
Depreciation and amortization	2,256			1,127			3,383			1,606			1,147			2,753
Total Operating Expenses	19,386			10,348			29,734			17,895			10,087			27,982
Operating Loss	(5,683		)	(433		)	(6,116		)	(5,142		)	(141		)	(5,283		)
Interest income (expense), net							10									(173		)
Income from investment							—									52,373
Other income, net							1,515									23
(Loss) Income before income taxes							$	(4,591	)							$	46,940

The assets for the UC segment decreased during the nine months ended September 30, 2015 primarily as a result of accelerated depreciation/amortization of office equipment and leasehold improvements associated with the exit of the office lease (see Note 13).

NOTE 12:    COMMITMENTS AND CONTINGENCIES

The Company is party, from time to time, to various legal proceedings, including patent infringement claims, regulatory investigations and tax examinations incidental to its business.  The Company continually monitors these legal proceedings, regulatory investigations and tax examinations to determine the impact and any required accruals.

On March 31, 2014, David J. Cuthbert was terminated as President and Chief Executive Officer of Alteva.  The Company notified Mr. Cuthbert that his termination was for “cause” and, as such, Mr. Cuthbert was not entitled to any of the benefits provided for under his employment agreement dated March 5, 2013, including cash severance and the acceleration of vesting on any unvested equity instruments.  Mr. Cuthbert disputed the Company’s basis for termination and claimed that he was due his full severance benefits.  As the Company did not want to incur further legal fees or the risk of distraction of a protracted legal dispute, on October 16, 2014, the Company, through mediation, entered into a settlement agreement and mutual release agreement (the “Settlement Agreement”) with Mr. Cuthbert.  In consideration for Mr. Cuthbert’s execution of the Settlement Agreement, the Company agreed to pay to Mr. Cuthbert the amount of $0.75 million less certain taxes and withholdings, which was accrued for and reported in the statement of operations under restructuring costs and other special charges, less insurance proceeds, for the nine months ended September 30, 2014.  The settlement agreement was paid out on October 28, 2014.

During the year ended December 31, 2014, the Company was named as a party to a lawsuit from Sprint regarding a certain tariff charge (IntraMTA carrier charge) billed by Alteva, paid by Sprint over a number of years that had not previously been disputed. Sprint has filed similar lawsuits against other carriers related to the same tariff charges. The Company has filed a motion to dismiss.  The amount of the claim filed by Sprint is for $0.2 million; however the Company has not been able to substantiate the basis for the claim amount and therefore, has not recorded an accrual as of September 30, 2015.

NOTE 13:    OFFICE RELOCATION

In February 2015, the Company entered into an agreement to terminate the lease for its corporate headquarters in Philadelphia, PA.  As part of this agreement, the Company was entitled to receive a payment of $1.5 million as long as the Company vacated the facility by May 18, 2015.  The Company vacated the facility on May 17, 2015 and received payment on June 22, 2015.  In connection with the lease termination, the Company has recognized other income of $1.5 million during the nine months ended September 30, 2015 in the statement of operations.  The Company depreciated the remaining net book value of the leasehold improvements and furniture and fixtures associated with the old headquarters, and recognize the remaining deferred rent liability through the move date of May 17, 2015. The statement of operations includes accelerated depreciation of zero and $0.8 million for the three and nine months ended September 30, 2015 reported in depreciation and amortization, respectively, as well as accelerated deferred rent of zero and $0.4 million for the three and nine months ended September 30, 2015, reported in selling, general and administrative expenses in the UC Segment, respectively.

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In connection with the lease termination, the Company entered into a lease for a new corporate headquarters in Philadelphia, PA dated February 27, 2015.  The terms of the lease are for 10 full years with minimum rental payments of $0.4 million for the first full twelve month period, escalating by 2.5% each year thereafter.  The first full twelve month period began on June 1, 2015 since the Company began operating from the new location on May 18, 2015.  Per the agreement, the Company paid a per diem rate from the date it begins operating from the new location until the first day of the first full month.

NOTE 14:  MERGER AGREEMENT

On September 2, 2015, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MBS Holdings, Inc., a Delaware corporation (“Parent”), and Arrow Merger Subsidiary, Inc., a New York corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent.

At the time that the Merger becomes effective (the “Effective Time”), (i) each issued and outstanding common share of the Company, par value $0.01 per share (the “Common Stock”), other than certain excluded shares, will be converted automatically into the right to receive $4.70 in cash (the “Common Stock Merger Consideration”), and (ii) each issued and outstanding 5% Series Preferred Share of the Company, par value $100 per share, will be converted automatically into the right to receive $100 all in cash, plus any accrued but unpaid dividends through the Closing Date (as defined in the Merger Agreement).

Completion of the Merger is subject to various closing conditions, including, among others, (a) the affirmative vote of at least seventy percent (70%) of the outstanding shares of Common Stock entitled to vote at a special shareholders meeting (“Shareholders’ Meeting”) in favor of adopting the Merger Agreement and approving the Merger, (b) the receipt of required regulatory approvals and consents, and (c) the absence of any law, injunction, judgment, order, decree or ruling restraining or prohibiting consummation of the Merger.  Each party’s obligation to consummate the Merger is also subject to certain additional conditions, which include the accuracy of the other party’s representations and warranties and the other party’s compliance with its covenants and obligations in all material respects (in each case, as contained in the Merger Agreement).

Shareholders of the Company have been asked to vote on the adoption of the Merger Agreement and the approval of the Merger at the Shareholders’ Meeting that is currently scheduled for November 16, 2015.

For the nine months ended, the Company incurred $0.9 million of costs associated with the pending Merger.  These costs are presented in selling, general and administrative expenses in the statements of operations.

If the proposal to adopt the Merger Agreement is not approved by the Shareholders, or if the Merger is not consummated for any other reason, under specified circumstances, Alteva will be required to pay Parent (a) a termination fee of $873,000, or (b) the lesser of $750,000 and Parent’s documented out-of-pocket transaction fees and expenses actually incurred in connection with the transactions contemplated in the Merger Agreement.

NOTE 15:    SUBSEQUENT EVENTS

On October 8, 2015, Missy Hogan and Jennifer Geiger, as Trustees for the Janice Lynn Livingston Special Needs Trust U/A 2/17/11 (the “Plaintiff”), filed a suit in New York state court against Alteva, Alteva’s Board of Directors (Kelly C. Bloss, Brian J. Kelley, Jeffrey D. Alario, Douglas B. Benedict, and Edward J. Morea, together with Alteva, Inc. “Alteva Defendants”), MBS Holdings, Inc. and Arrow Merger Subsidiary, Inc.  Plaintiff has requested that the court certify the suit as a class action, but the court has not ruled on the request.  In the lawsuit, Plaintiff alleges that Alteva Defendants have breached their fiduciary duties to the public shareholders of Alteva by, among other things, failing to take reasonable steps to obtain and/or ensure that the public shareholders receive adequate and fair value for their shares in the proposed transaction.  Plaintiff also alleges that MBS Holdings, Inc. and Arrow Merger Subsidiary, Inc. aided and abetted Alteva Defendants in breaching their fiduciary duties to the public shareholders of Alteva.

In addition, in a filing dated October 13, 2015, Plaintiff requested that the court issue an order restraining the November 16, 2015 vote.  On October 19, 2015, the court denied Plaintiff’s request for injunctive relief, but ordered expedited discovery and a hearing on November 12, 2015 concerning whether a preliminary injunction should be issued enjoining the November 16, 2015 vote.

At the November 12, 2015 hearing, the court denied Plaintiff’s request for a preliminary injunction.  The underlying case remains pending in New York state court.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q, including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects” and words of similar import, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the geographic regions in which we operate; industry capacity; goodwill and long-lived asset impairment; demographic changes; management turnover; technological changes and changes in consumer demand; existing governmental regulations and changes in or our failure to comply with, governmental regulations; legislative proposals relating to the businesses in which we operate; changes to the USF; elimination of subsidies; risks associated with our unfunded pension liability; competition; the loss of any significant ability to attract and retain highly skilled personnel and any other factors that are described in “Risk Factors.” Given these uncertainties, current and prospective investors should be cautioned regarding reliance on such forward-looking statements. Except as required by law, we disclaim any obligation to update any such factors or to publicly announce the results of any revision to any of the forward-looking statements contained herein to reflect future events or developments. For a further discussion of the matters described above, see Item 1A, “Risk Factors” herein and Item 1A, “Risk Factors” in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

Overview

Alteva, Inc. (we, our or us) is a cloud-based communications company that provides Unified Communication (“UC”) solutions, including enterprise hosted VoIP and we operate a regional Incumbent Local Exchange Carrier (“ILEC”) in southern Orange County, New York and northern New Jersey. Our UC segment delivers cloud-based UC solutions including BroadSoft-based VoIP integrated with Microsoft Lync, Microsoft Exchange, Google Apps for Business, leading customer relationship management (“CRM”) applications such as Salesforce.com and Bring-Your-Own-Device (BYOD) solutions for Mobility, which allows users to take advantage of all of the features available to them no matter where they are located or what device they are using.  Our Telephone segment consists of our ILEC operations that provide local and toll telephone service to residential and business customers, internet high-speed broadband service, and DIRECTV. Our cloud-based Unified Communication as a Service (“UCaaS”) solutions are focused on medium, large and enterprise markets, which are defined as 20-1,000 users per location. We meet our customers’ unique needs for a business communications solution that integrates multi-location, mobility, business productivity and analytics, into a single seamless experience.

This discussion and analysis provides information about the important aspects of our operations and investments, both at the consolidated and segment levels, and includes discussions of our results of operations, financial position and sources and uses of cash.

This discussion and analysis should be read in conjunction with the accompanying Condensed Consolidated Financial Statements and Notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

Executive Summary

	Nine months ended September 30, 2015									Nine months ended September 30, 2014									Change
			% of Total		Operating			Operating				% of Total		Operating			Operating					Operating
($ in thousands)	Revenue		Revenue		Loss			Margin		Revenue		Revenue		Loss			Margin		Revenue			Loss
UC	$	13,703	58	%	$	(5,683	)	(41	)%	$	12,753	56	%	$	(5,142	)	(40	)%	$	950		$	(541	)
Telephone	9,915		42	%	(433		)	(4	)%	9,946		44	%	(141		)	(1	)%	(31		)	(292		)
Total	$	23,618	100	%	$	(6,116	)	(26	)%	$	22,699	100	%	$	(5,283	)	(23	)%	$	919		$	(833	)

Revenues increased 4% to $23.6 million for the nine months ended September 30, 2015, in comparison to $22.7 million for the nine months ended September 30, 2014.  The increase is primarily due to our UC license and usage revenues.  As of September 30, 2015, there were over 57,000 users on Alteva’s hosted platform, which represents an increase of 15% of the installed base compared September 30, 2014.   As of September 30, 2015, the Company had approximately 5,400 new users, or 9% of the installed base, sold and scheduled for implementation.  During the nine months ended September 30, 2015, we had an operating loss of $6.1 million, compared to an operating loss of $5.3 million for the nine months ended September 30, 2014.  The increase in operating loss was attributable to higher depreciation expense incurred in connection with the acceleration of depreciation associated with leasehold improvements written off as a result of the Philadelphia, PA office move in May 2015, higher cost of services and products due to increased sales and higher selling, general and administrative expenses primarily due to professional fees and other costs associated with the review of strategic alternatives and entering into the Agreement and Plan of Merger with MBS Holdings, Inc.  During the nine months ended September 30, 2015, we had a net loss of $3.8 million compared to net income of $29.9 million for the nine months ending September 30, 2014, which was primarily due to the gain on sale from the O-P investment in 2014. In 2015, we no longer have income from the O-P investment.

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Results of Operations for the three and nine months ended September 30, 2015 and 2014

OPERATING REVENUES

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	For the three months ended September 30, 2015				For the three months ended September 30, 2014				Change
			% of Total				% of Total
($ in thousands)	Revenue		Revenue		Revenue		Revenue		Revenue
UC	$	4,718	59	%	$	4,308	57	%	$	410
Telephone	3,252		41	%	3,263		43	%	(11		)
Total	$	7,970	100	%	$	7,571	100	%	$	399

Revenues for our UC segment increased 10% for the three months ended September 30, 2015 compared to the same period in 2014.  This increase was primarily associated with a $0.3 million increase in license and usage revenue from the segment’s organic growth.  Revenues for our Telephone segment were flat for the three months ended September 30, 2015 compared to the same period in 2014, due to decreases in access lines partially offset by higher pooling arrangements, access line rate increases and custom pole work.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	For the nine months ended September 30, 2015				For the nine months ended September 30, 2014				Change
			% of Total				% of Total
($ in thousands)	Revenue		Revenue		Revenue		Revenue		Revenue
UC	$	13,703	58	%	$	12,753	56	%	$	950
Telephone	9,915		42	%	9,946		44	%	(31		)
Total	$	23,618	100	%	$	22,699	100	%	$	919

Revenues for our UC segment increased 8% for the nine months ended September 30, 2015 compared to the same period in 2014.  This increase was primarily associated with a $0.9 million increase in license and usage revenue from the segment’s organic growth.  Revenues for our Telephone segment were relatively flat for the nine months ended September 30, 2015 compared to the same period in 2014, due to decreases in access lines partially offset higher pooling arrangements, access line rate increases and custom pole work.

OPERATING EXPENSES

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	UC							Telephone							Consolidated
	For the Three Month Ended September 30							For the Three Month Ended September 30							For the Three Month Ended September 30
(in thousands)	2015		2014		Change			2015		2014		Change			2015		2014		Change
Cost of services and products	$	2,268	$	1,923	$	345		$	933	$	1,001	$	(68	)	$	3,201	$	2,924	$	277
Selling, general and administrative	3,624		3,048		576			2,391		1,678		713			6,015		4,726		1,289
Depreciation and amortization	529		546		(17		)	362		385		(23		)	891		931		(40		)
Loss on disposal, restructuring costs and other special charges	—		336		(336		)	—		264		(264		)	—		600		(600		)
Total operating expenses	$	6,421	$	5,853	$	568		$	3,686	$	3,328	$	358		$	10,107	$	9,181	$	926

Total operating expenses increased 10% for the three months ended September 30, 2015 compared to the three months ended September 30, 2014 primarily due to selling, general and administrative expenses increasing 27% and cost of services and products increasing 10%.  The increase in selling, general and administrative expenses was primarily due to an increase in professional fees and other costs associated with the review of strategic alternatives and entering into the Agreement and Plan of Merger with MBS Holdings, Inc.  The increase in cost of services and products was primarily related to the variable costs associated with the additional seats on the platform and the hiring of additional operations personnel to support the implementation of new seats, including the growing implementation backlog.

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Cost of Services and Products

Cost of services and products for our UC segment increased 18% for the three months ended September 30, 2015 compared to the same period in 2014.  The increase in UC cost of services expenses was due to the variable costs associated with the additional seats on the platform and the hiring of additional operations personnel to support the implementation of new seats, including the growing implementation backlog.

Cost of services and products for our Telephone segment remained relatively flat for the three months ended September 30, 2015 compared to the same period in 2014.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 27% for the three months ended September 30, 2015 compared to the same period in 2014 primarily due to professional fees and other costs associated with the review of strategic alternatives and entering into the Agreement and Plan of Merger with MBS Holdings, Inc.

Depreciation and Amortization Expense

Depreciation and amortization expense remained relatively unchanged for the three months ended September 30, 2015 compared to the three months ended September 30, 2014.

Loss on Disposal, Restructuring Costs and Other Special Charges

We incurred $0.6 million charge in connection with the settlement with our former CEO for the three months ended September 30, 2014.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	UC							Telephone							Consolidated
	For the Nine Month Ended September 30							For the Nine Month Ended September 30							For the Nine Month Ended September 30
(in thousands)	2015		2014		Change			2015		2014		Change			2015		2014		Change
Cost of services and products	$	6,769	$	5,838	$	931		$	2,918	$	3,005	$	(87	)	$	9,687	$	8,843	$	844
Selling, general and administrative	10,361		10,059		302			6,303		5,627		676			16,664		15,686		978
Depreciation and amortization	2,256		1,606		650			1,127		1,147		(20		)	3,383		2,753		630
Loss on disposal, restructuring costs and other special charges	—		392		(392		)	—		308		(308		)	—		700		(700		)
Total operating expenses	$	19,386	$	17,895	$	1,491		$	10,348	$	10,087	$	261		$	29,734	$	27,982	$	1,752

Total operating expenses increased 6% for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 primarily due to depreciation and amortization increasing 23% and cost of services and products increasing 10%. The depreciation increase was due to the acceleration of depreciation associated with the Philadelphia, PA office move and the increase in cost of services and products was primarily related to the variable costs associated with the additional seats on the platform and the hiring of additional operations personnel to support the implementation of new seats, including the growing implementation backlog.

Cost of Services and Products

Cost of services and products for our UC segment increased 16% for the nine months ended September 30, 2015 compared to the same period in 2014.  The increase in UC cost of services expenses was due to the variable costs associated with the additional seats on the platform and the hiring of additional operations personnel to support the implementation of new seats, including the growing implementation backlog. 

Cost of services and products for our Telephone segment remained relatively flat for the nine months ended September 30, 2015 compared to the same period in 2014.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 6% for the nine months ended September 30, 2015 compared to the same period in 2014 primarily due to professional fees and other costs associated with the review of strategic alternatives and entering into the Agreement and Plan of Merger with MBS Holdings, Inc.

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Depreciation and Amortization Expense

Depreciation and amortization expense in the UC segment increased 40% for the nine months ended September 30, 2015 compared to the same period in 2014 primarily due to the accelerated depreciation of leasehold improvements to be written off in connection with the Philadelphia, PA office move (see Note 13).

Loss on Disposal, Restructuring Costs and Other Special Charges

We incurred $0.7 million charge in connection with the settlement with our former CEO for the nine months ended September 30, 2014.

TOTAL OTHER INCOME (EXPENSE)

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	For the Three Month Ended September 30,
(in thousands)	2015			2014			Change
Interest income (expense), net	$	(2	)	$	20		$	(22	)
Income from investment	—			—			—
Other income, net	25			(4		)	29
Total other income	$	23		$	16		$	7

Total other income was insignificant and flat for the three months ended September 30, 2015, as compared to same period in 2014.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	For the Nine Month Ended September 30,
(in thousands)	2015		2014			Change
Interest income (expense), net	$	10	$	(173	)	$	183
Income from investment	—		52,373			(52,373		)
Other income, net	1,515		23			1,492
Total other income	$	1,525	$	52,223		$	(50,698	)

Total other income decreased 97% for the nine months ended September 30, 2015, as compared to same period in 2014. The decrease was due to the gain on the sale of our ownership in the O-P partnership in 2014, offset by the gain on our lease termination in 2015 (see Note 13).

INCOME TAXES

For the three months ended September 30, 2015, we had an income tax benefit of $0.3 million, or 14% of loss before income taxes, as compared to an income tax benefit of $0.3 million, or 17% of loss before income taxes, for the three months ended September 30, 2014.  For the nine months ended September 30, 2015, we had an income tax benefit of $0.8 million, or 16% of loss before income taxes, as compared to an income tax expense of $17.0 million, or 36% of income before income taxes, for the nine months ended September 30, 2014.  The estimated effective tax rate for each period includes projections of tax expense on the expected change in our valuation allowance for deferred tax assets. The effective tax rate for the period ended September 30, 2015 is lower than the federal tax rate due to the valuation allowance for deferred tax assets reducing the overall tax benefit recorded.  For the nine months ended September 30, 2014, the higher effective tax rate was due to the exercise of the Put being treated as a discrete item and was taxed at the full federal tax rate of 35%.

LIQUIDITY AND CAPITAL RESOURCES

We had $6.5 million of cash and cash equivalents at September 30, 2015, as compared with $24.0 million at December 31, 2014.  We sold all of our ownership interest in the O-P on April 30, 2014 for gross proceeds of $50 million (see Note 4).  We did not receive any income from the O-P after April 30, 2014.  We used a portion of the proceeds to repay all of the outstanding borrowings under the TriState credit facility, pay taxes on the related gain and fund the special cash dividend paid in the second quarter of 2015.   We expect the remaining gross proceeds to be used to fund working capital needs.

On November 7, 2014, we entered into a new demand line of credit with TriState (the “Demand Line of Credit”) to allow for borrowings up to $5.0 million.  We borrow or repay our debt as needed based upon our working capital obligations.  It is up to the discretion of TriState to approve borrowings within the allowed line of credit limit and TriState may, at any time, demand that we make payment on an outstanding balance. As of September 30, 2015, the Company did not have any outstanding balance under the Demand Line of Credit.

On May 14, 2015, the stock repurchase program that was authorized in August 2014 was terminated by our Board of Directors in connection with approving the special cash dividend.

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CASH FROM OPERATING ACTIVITIES

Net cash used in operating activities during the nine months ended September 30, 2015 of $0.4 million compared to cash used in operating activities for the nine months ended September 30, 2014 of $11.6 million.  This change was primarily due to payments of taxes associated with the gain on the sale of our ownership interest in the O-P.

CASH FROM INVESTING ACTIVITIES

Net cash used in investing activities during the nine months ended September 30, 2015 was $1.0 million compared to cash provided by investing activities of $49.5 million for the nine months ended September 30, 2014.  Net cash used in investing activities for the nine months ended September 30, 2015 was due to the purchase of leasehold improvements and furniture for the new office lease in Philadelphia, PA.  Net cash provided by investing activities for the nine months ended September 30, 2014 was primarily due to the $49.8 million proceeds from the exercise of the O-P Put that represented the return of our investment.

CASH FROM FINANCING ACTIVITIES

Net cash used in financing activities during the nine months ended September 30, 2015 was $16.1 million compared to cash used in financing activities of $10.6 million for the nine months ended September 30, 2014.  During the nine months ended September 30, 2015, we paid out $15.6 million for a special dividend of $2.60 per common share.  In addition, we purchased $0.1 million of treasury shares from employee restricted stock vestings and made capital lease payments totaling $0.4 million.  The financing activities for the nine months ended September 30, 2014 were attributed to the repayment of our outstanding balance of $11.6 million on our TriState credit facility from the proceeds received for the sale of our ownership in the O-P partnership.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are not subject to any material market risk. Our exposure to changes in interest rates results from our borrowing activities. There were no material changes to our quantitative disclosure about market risk as presented in item 7A of our Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

ITEM 4.  CONTROLS AND PROCEDURES

Our management, with the participation of our Chief Executive Officer (Principal Executive Officer) and our Interim Chief Financial Officer (Principal Financial and Accounting Officer) have evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon this evaluation, our Chief Executive Officer (Principal Executive Officer) and our Interim Chief Financial Officer (Principal Financial and Accounting Officer) have concluded that our disclosure controls and procedures were effective as of September 30, 2015. There were no changes in our internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A. - RISK FACTORS

There were no material changes to our risk factors as presented in Item 1A of our Annual Report on Form 10-K, as amended for the year ended December 31, 2014, with exception of the following:

Reductions in USF funding and intercarrier compensation may negatively impact our financial results.  Additional regulatory changes may have a material adverse effect on our operations as well.

We operate in a heavily regulated industry.  A significant portion of the revenues in our Telephone segment has generally been supported by regulations that provide for local and network access revenues and USF funds.  Changes in the funding and/or payout rules for the USF will further reduce our revenues obtained from the USF and we may not be able to replace this lost revenue.

On November 28, 2011, the FCC released a comprehensive order regarding reform of the Universal Service Fund and Intercarrier Compensation (“ICC”).  The order specified that the USF would be renamed the Connect America Fund (“CAF”).  Funds from CAF will be allocated with a greater emphasis on stimulating broadband build out in the United States.  Additionally, the order mandated a decline in overall revenues deemed interstate.  Currently these revenues are received from end users, interexchange carriers and the USF.  The total of these revenues will decline 5% a year and the USF or CAF support must decline accordingly.  This change commenced on July 1, 2012 and will continue annually for the next 10 years.

Finally, the order contains a provision that implements a “ceiling” on the amount of corporate overhead expenses that can be recovered by an ILEC through CAF.  Historically, the USF fund has allowed ILECs to recover their reasonable costs without restriction.  In 2012, a ceiling was established based on corporate overhead cost per access line.  Accordingly, we anticipate a significant reduction in funds that we are eligible to receive from the USF.  This reduction in USF revenue is expected to significantly impact our revenues and financial results over the next several years.

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On November 28, 2011, the FCC released a comprehensive order concerning Intercarrier Compensation.  The order reflected the FCC’s desire for telephone companies to eventually eliminate intercarrier compensation altogether.  To implement this, the FCC has mandated that companies lower their access rates at the intrastate level to the interstate rate level by 2013 which we have complied with.  In addition, a rate of return carrier, such as us, must reduce its rates for some access elements to zero within nine years.  While this will be offset to some extent by additional end user charges (known as ARC or Access Recovery Charge), the overall effect will be a decline in revenue.

On July 29, 2015 the Federal Communications Commission (“FCC”) released a public notice that, pursuant to the FCC’s USF/ICC Transformation Order from 2011, a rule was adopted to eliminate high-cost universal service support in ILEC study areas where an unsubsidized carrier or a combination of unsubsidized carriers offers voice and broadband services that meet certain service obligations as defined by the FCC. The public notice published the study areas where there was 100 percent overlap between subsidized and unsubsidized carriers.  The preliminary findings of the study indicated Alteva’s ILEC coverage in New Jersey was determined to be 100 percent overlapped, and Alteva’s ILEC coverage in New York was determined to be between 99 and 100 percent overlapped.  The Company filed a response indicating there was not 100% overlap coverage, however, further communication from the FCC regarding their determination is pending.  If the FCC does not agree with the Company’s analysis, or it is determined by the FCC in future years that the overlap coverage is 100 percent, we would be subject to the elimination of the subsidies. For the year ended December 31, 2014, we received $0.3 million in subsidies for our ILEC coverage in New Jersey and $0.8 million in subsidies for our ILEC coverage in New York.

Additional regulatory changes could adversely impact the rates we are permitted to charge our customers, reduce payments to us from the USF or restrict our ability to effectively compete in the market place.  Regulatory changes could also restrict our ability to secure new sources of capital and/or grow through strategic acquisitions or alliances.  In addition, the failure of regulations to change in a manner that would establish an environment in which we may compete on more even terms with our actual economic competitors could also adversely affect our profitability.

The Company may fail to complete the proposed merger with and into MBS Holdings, Inc.

On September 2, 2015, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MBS Holdings, Inc., a Delaware corporation (“Parent”), and Arrow Merger Subsidiary, Inc., a New York corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent.

Completion of the Merger is subject to various closing conditions, including, among others, (a) the affirmative vote of at least seventy percent (70%) of the outstanding shares of Common Stock entitled to vote at a special shareholders meeting (“Shareholders’ Meeting”) in favor of adopting the Merger Agreement and approving the Merger, (b) the receipt of required regulatory approvals and consents, and (c) the absence of any law, injunction, judgment, order, decree or ruling restraining or prohibiting consummation of the Merger.  Each party’s obligation to consummate the Merger is also subject to certain additional conditions, which include the accuracy of the other party’s representations and warranties and the other party’s compliance with its covenants and obligations in all material respects (in each case, as contained in the Merger Agreement).

There can be no assurance that the Company will receive the necessary approvals for the transaction or that the Company will be able to hold the Shareholders’ Meeting as currently scheduled. Delays in the Merger closing, could divert attention from the Company’s ongoing operations on the part of management and employees and adversely impact the Company. Failure to complete the Merger for any reason could negatively impact the Company’s: ability to motivate and retain employees, relationships with customers and vendors, stock price and future business and financial results.

The Company has incurred and expects to incur substantial transaction fees and costs in connection with the Merger.

The Company has incurred and expects to incur additional material non-recurring expenses in connection with the Merger and completion of the transactions contemplated by the Merger Agreement. If the proposal to adopt the Merger Agreement is not approved by the Shareholders, or if the Merger is not consummated for any other reason, under specified circumstances, Alteva will be required to pay Parent (a) a termination fee of $873,000, or (b) the lesser of $750,000 and Parent’s documented out-of-pocket transaction fees and expenses actually incurred in connection with the transactions contemplated in the Merger Agreement.

Litigation has been instituted against the Company and members of the Company’s board of directors, challenging the Merger, and adverse judgments in these lawsuits may prevent the Merger from becoming effective within the expected timeframe or at all.

The Company and members of the Company’s board of directors have been, and may continue to be, named as defendants in lawsuits or other proceedings that may be brought by Shareholders challenging the Merger. See “Note 15: Subsequent Events” in the notes to the condensed and consolidated financial statements above. Even if the plaintiffs in these potential actions are not successful in obtaining an injunction, they may nevertheless continue the action and seek damages after the Merger has closed. In addition, the costs of defending against such claims could adversely affect the financial condition of the Company. We cannot provide any assurance that such proceedings, and, if relevant, the settlement of any such proceedings, will not have a material adverse effect on the Company, its operations or future prospects.

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ITEM 6. EXHIBITS

3.1	Articles of Incorporation, as amended, are incorporated herein by reference from Exhibit 3(i) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
3.2	By-Laws, as amended, are incorporated herein by reference from Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
3.3	Certificate of Amendment of the Certificate of Incorporation filed with the New York Department of State on May 21, 2013 is incorporated herein by reference from Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
10.1	Partnership Interest Purchase Agreement as of April 30, 2014 between Alteva, Inc. and Cellco Partnership is incorporated herein by reference from Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.
10.2	400 Market Street Office Lease as of February 27, 2015 between Alteva, Inc. and 400 Market L.P. is incorporated by reference from Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
10.3	Form of Global Amendment to Award Agreements Under The Amended and Restated Warwick Valley Company 2008 Long-Term Incentive Plan is incorporated herein by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on August 27, 2015.
10.4	Merger Agreement dated September 2, 2015, by and between Alteva, Inc. and MBS Holdings, Inc. and Arrow Merger Subsidiary, Inc. is incorporated herein by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 3, 2015.
10.5	Form of Global Amendment to Certain Restricted Stock Award Agreements under the Amended and Restated Warwick Valley Company 2008 Long-Term Incentive Plan.
31.1	Rule 13a-14(a)/15d-14(a) Certification signed by Brian J. Kelley, Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification signed by Andrea E. McHugh, Interim Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Brian J. Kelley, Chief Executive Officer.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Andrea E. McHugh, Interim Chief Financial Officer.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Alteva, Inc.
		(Registrant)
Date:	November 13, 2015	/s/ Brian J. Kelley
		Brian J. Kelley
		Chief Executive Officer
		(Principal Executive Officer)
Date:	November 13, 2015	/s/ Andrea E. McHugh
		Andrea E. McHugh
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Index to Exhibits

3.1	Articles of Incorporation, as amended, are incorporated herein by reference from Exhibit 3(i) to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2003.
3.2	By-Laws, as amended, are incorporated herein by reference from Exhibit 3.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
3.3	Certificate of Amendment of the Certificate of Incorporation filed with the New York Department of State on May 21, 2013 is incorporated herein by reference from Exhibit 3.1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
10.1	Partnership Interest Purchase Agreement as of April 30, 2014 between Alteva, Inc. and Cellco Partnership is incorporated herein by reference from Exhibit 10.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014.
10.2	400 Market Street Office Lease as of February 27, 2015 between Alteva, Inc. and 400 Market L.P. is incorporated by reference from Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015.
10.3	Form of Global Amendment to Award Agreements Under The Amended and Restated Warwick Valley Company 2008 Long-Term Incentive Plan is incorporated herein by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 27, 2015.
10.4	Merger Agreement dated September 2, 2015, by and between Alteva, Inc. and MBS Holdings, Inc. and Arrow Merger Subsidiary, Inc. is incorporated herein by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on September 3, 2015.
10.5	Form of Global Amendment to Certain Restricted Stock Award Agreements under the Amended and Restated Warwick Valley Company 2008 Long-Term Incentive Plan.
31.1	Rule 13a-14(a)/15d-14(a) Certification signed by Brian J. Kelley, Chief Executive Officer.
31.2	Rule 13a-14(a)/15d-14(a) Certification signed by Andrea E. McHugh, Interim Chief Financial Officer.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Brian J. Kelley, Chief Executive Officer.
32.2	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by Andrea E. McHugh, Interim Chief Financial Officer.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

27

EX-10.5

Exhibit 10.5

GLOBAL AMENDMENT TO CERTAIN
RESTRICTED STOCK AWARD AGREEMENTS
UNDER THE
AMENDED AND RESTATED WARWICK VALLEY TELEPHONE COMPANY

2008 LONG-TERM INCENTIVE PLAN

This Amendment (this “Amendment”) is dated as of August 24, 2015 (the “Effective Date”).

WHEREAS, Alteva, Inc. (the “Company”) is a party certain Restricted Stock Award Agreements (the “Agreements”) with directors of the Company (the “Participants”) under the Amended and Restated Warwick Valley Telephone Company 2008 Long-Term Incentive Plan, as amended (the “Plan”), pursuant to which the Participants are entitled to certain Shares (as defined in the Plan, the number of which are specified in the Agreements) subject to certain vesting restrictions, conditions, and other terms specified in the Agreement;

WHEREAS, the Company has determined that it is desirable and in the best interest of the parties to accelerate the vesting restrictions in the Agreements (among other reasons, to retain the continued service of the Participants) and to amend such Agreement to provide for the payment of fees or legal expenses in connection with the amendment of the Agreement.

NOW, THEREFORE, for valuable consideration and intending to be bound by the provisions of this Agreement, the parties agree as follows:

1.Effective as of the Effective Date, Section 1(b) of each of the Agreements is amended to add the following provision at the end thereof:

Notwithstanding anything else in this Agreement or the Plan to the contrary, the restrictions on transfer set forth in Section 1(c) shall lapse and the Shares represented by this Agreement shall vest on the close of business on the Effective Date.

2.Effective as of the Effective Date, a new Section 4(i) is added to each of the Agreements to read as follows:

(i)Fees and Expenses.  The Company shall pay all reasonable legal fees and related expenses incurred by the Participant in connection with this Agreement following a Change in Control of the Company, including, without limitation, all such fees and expenses, if any, incurred in connection with the Participant seeking to obtain or enforce his or her rights or benefits provided by the Agreement (including rights or benefits provided by the Amendment thereto dated as of August 24 2015).  The payment of such fees and expenses shall be made to the Participant as they are incurred, but in no event shall they be paid later than five (5) business days after the presentation by Participant of an invoice therefor.  To the extent required by Section 409A, each reimbursement provided under this Agreement shall be provided in accordance with the following: (i) the

amount of expenses eligible for reimbursement during each calendar year cannot affect the expenses eligible for reimbursement in any other calendar year; (ii) any reimbursement of an eligible expense shall be paid to the Participant on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) any right to reimbursements under this Agreement shall not be subject to liquidation or exchange for another benefit.

3.For the avoidance of doubt, in the event that a Participant also serves as an executive officer of the Company, this Amendment shall be effective only with respect to those grants that were made in respect to such Participant’s service as a director, and not grants made in respect of such Participant’s service as an executive officer.

4.A copy of this Amendment shall be provided by the Company to each Participant. To the fullest extent permitted by the Plan and/or applicable law, each Participant shall be deemed to have accepted this Amendment without any further action on such Participant’s part. Notwithstanding the foregoing, a Participant may consent by countersigning a counterpart signature page to this Amendment. This Amendment may be executed in any number of counterparts (which may be effectively delivered by facsimile or other electronic means), any one of which need not contain the signatures of more than one party, but all of such counterparts together shall constitute one agreement.

signature page follows

This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law

Alteva, Inc.

By:

Name:

Title:

Consented to and

agreed as of the Effective Date:

Participant:

(signature)

(print or type name)

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Brian J. Kelley, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Alteva, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2015

/s/ Brian J. Kelley

Brian J. Kelley

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Andrea E. McHugh, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Alteva, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2015

/s/ Andrea E. McHugh

Andrea E. McHugh

Interim Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT 0F 2002

In connection with the Quarterly Report of Alteva, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian J. Kelley, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Brian J. Kelley

Brian J. Kelley

Chief Executive Officer

(Principal Executive Officer)

November 13, 2015

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT 0F 2002

In connection with the Quarterly Report of Alteva, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Andrea E. McHugh, Interim Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ Andrea E. McHugh

Andrea E. McHugh

Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

November 13, 2015

XML

Pension Plans And Postretirement Obligations (Components Of Net Periodic Cost (Gain)) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	$ 195	$ 191	$ 586	$ 604
Expected return on plan assets	(195)	(228)	(586)	(669)
Amortization of prior service cost	14	14	42	42
Recognized actuarial loss	237	142	711	497
Net periodic benefit cost (benefit)	251	119	753	474
Postretirement Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Interest cost	24	30	73	89
Expected return on plan assets	7	(6)	21	(15)
Amortization of prior service cost	(11)	(49)	(34)	(147)
Recognized actuarial loss	21	6	63	18
Net periodic benefit cost (benefit)	$ 41	$ (19)	$ 123	$ (55)

XML

Commitments And Contingencies (Narrative) (Details) - USD ($) $ in Thousands		12 Months Ended
	Oct. 28, 2014	Dec. 31, 2014
Sprint Lawsuit [Member]
Commitments And Contingencies [Line Items]
Claim amount		$ 200
The Settlement Agreement [Member]
Commitments And Contingencies [Line Items]
Settlement amount	$ 750

XML

Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015 segment item
Segment Information [Abstract]
Number of segments | segment	2
Estimated population	50,000

XML

Orange County-Poughkeepsie Limited Partnership (Narrative) (Details) - Orange County-Poughkeepsie Limited Parnership [Member] - USD ($)		9 Months Ended	12 Months Ended
	Apr. 30, 2014	Sep. 30, 2015	Dec. 31, 2014	Dec. 31, 2012	Apr. 29, 2014
Option Indexed to Issuer's Equity [Line Items]
Equity interest in O-P					8.108%
Equity method investment, amount the investment account was reduced to		$ 0	$ 0	$ 0
Put Option [Member]
Option Indexed to Issuer's Equity [Line Items]
Proceeds of sale of equity method investment	$ 50,000,000
Gain on sale of equity method investment	$ 49,800,000

XML

Debt Obligations (Tables)

9 Months Ended

Sep. 30, 2015

Debt Obligations [Abstract]

Schedule Of Debt Obligations

		As of
($ in thousands)		September 30, 2015		December 31, 2014
Short-term debt:
Capital leases and other borrowings, current portion	$	405	$	325
Long-term debt:
Capital leases and other borrowings		403		295
Total debt obligations	$	808	$	620

XML

Merger Agreement (Narrative) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Common stock, par value	$ 0.01	$ 0.01
Common Stock Merger Consideration [Member]
Common stock, par value	0.01
Merger Consideration in cash, per share	$ 4.70
Affirmative vote, percentage	70.00%
Pending Merger Costs	$ 900,000
Termination Fee	873,000
Required payment	$ 750,000
5 % Series Preferred Stock Member | Common Stock Merger Consideration [Member]
Percentage of Preferred Shares	5.00%
Merger Consideration in cash, per share	$ 100
Preferred shares, par value	$ 100

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Stock Based Compensation (Schedule Of Stock Option Activity) (Details) - Stock Options [Member]	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding - Beginning of period, Shares	327,003
Forfeited or expired, Shares	(22,655)
Outstanding - End of period, Shares	304,348
Vested and Expected to Vest at June 30, 2015, shares	295,218
Exercisable at June 30, 2015, Shares	260,555
Outstanding - Beginning of period, Weighted Average Exercise Price | $ / shares	$ 12.18
Forfeited or expired, Weighted Average Exercise Price | $ / shares	11.02
Outstanding - End of period, Weighted Average Exercise Price | $ / shares	$ 12.26
Outstanding - End of period, Weighted Average Contractual Life (Years)	6 years 1 month 10 days

XML

Income Taxes (Narrative) (Details)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Taxes [Abstract]
Statutory federal income tax rate	18.00%	36.00%

XML

Segment Information (Segment Income Statement Information) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Operating Revenues	$ 7,970	$ 7,571	$ 23,618	$ 22,699
Cost of services and products	3,201	2,924	9,687	8,843
Selling, general and administration expense	6,015	4,726	16,664	15,686
Loss on disposal, restructuring costs and other special charges		600		700
Depreciation and amortization	891	931	3,383	2,753
Total operating expenses	10,107	9,181	29,734	27,982
Operating Loss	(2,137)	(1,610)	(6,116)	(5,283)
Interest income (expense), net	(2)	20	10	(173)
Income from investment				52,373
Other income, net	25	(4)	1,515	23
(Loss) income before income taxes	(2,114)	(1,594)	(4,591)	46,940
Unified Communications [Member]
Segment Reporting Information [Line Items]
Operating Revenues	4,718	4,308	13,703	12,753
Cost of services and products	2,268	1,923	6,769	5,838
Selling, general and administration expense	3,624	3,048	10,361	10,059
Loss on disposal, restructuring costs and other special charges		336		392
Depreciation and amortization	529	546	2,256	1,606
Total operating expenses	6,421	5,853	19,386	17,895
Operating Loss	(1,703)	(1,545)	(5,683)	(5,142)
Telephone [Member]
Segment Reporting Information [Line Items]
Operating Revenues	3,252	3,263	9,915	9,946
Cost of services and products	933	1,001	2,918	3,005
Selling, general and administration expense	2,391	1,678	6,303	5,627
Loss on disposal, restructuring costs and other special charges		264		308
Depreciation and amortization	362	385	1,127	1,147
Total operating expenses	3,686	3,328	10,348	10,087
Operating Loss	$ (434)	$ (65)	$ (433)	$ (141)

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Seat Licenses And Other Intangible Assets

9 Months Ended

Sep. 30, 2015

Seat Licenses And Other Intangible Assets [Abstract]

Seat Licenses And Other Intangible Assets

NOTE 3: SEAT LICENSES AND OTHER INTANGIBLE ASSETS

Intangible assets with finite lives are amortized over their respective estimated useful lives to their estimated residual value. Identifiable intangible assets that are subject to amortization are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable.

The components of seat licenses are as follows:

	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of September 30, 2015
Seat licenses	5years	$	3,399	$	(1,862	)	$	1,537
	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of December 31, 2014
Seat licenses	5years	$	2,936	$	(1,393	)	$	1,543

The components of other intangible assets are as follows:

	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of September 30, 2015
Customer relationships	8years	$	5,400	$	(2,812	)	$	2,588
Trade name	15years		2,400		(667	)		1,733
Website	12years		95		(34	)		61
Total		$	7,895	$	(3,513	)	$	4,382
	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of December 31, 2014
Customer relationships	8years	$	5,400	$	(2,306	)	$	3,094
Trade name	15years		2,400		(547	)		1,853
Website	12years		95		(22	)		73
Total		$	7,895	$	(2,875	)	$	5,020

XML

Earnings (Loss) Per Share (Schedule Of Weighted Average Number Of Shares Of Common Stock Used In Diluted Earnings (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended				9 Months Ended
		Sep. 30, 2015		Sep. 30, 2014		Sep. 30, 2015		Sep. 30, 2014
Earnings (Loss) Per Share [Abstract]
Net (loss) income applicable to common stock and participating securities		$ (1,824)		$ (1,336)		$ (3,857)		$ 29,939
Less: income applicable to participated securities	[1]							(1,174)
Net (loss) income applicable to common stock		$ (1,824)		$ (1,336)		$ (3,857)		$ 28,765
Weighted average shares outstanding - Basic and Diluted		5,871	[2]	5,826	[2]	5,853	[3]	5,802	[3]
Net (loss) income per share - Basic and Diluted		$ (0.31)		$ (0.23)		$ (0.66)		$ 4.96
Outstanding participating securities		100		200		100		200

[1] For the nine months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities. As the participating securities do not participate in losses, there was no allocation of loss for the nine months ended September 30, 2015.

[2] For the three months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal

[3] For the nine months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

XML

Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2015

Shareholders' Equity [Abstract]

Summary Of The Changes To Shareholders' Equity

		For the nine months ended September 30,
($ in thousands)		2015			2014
Shareholders' equity, beginning of period	$	40,156		$	13,006
Net (loss) income		(3,838	)		29,958
Dividends paid on common stock		(15,601	)		-
Dividends paid on preferred stock		(19	)		(19	)
Stock based compensation		684			677
Treasury stock purchases		(125	)		(399	)
Changes in pension and postretirement benefit plans		782			410
Shareholders' equity, end of period	$	22,039		$	43,633

XML

Earnings (Loss) Per Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings (Loss) Per Share [Abstract]

Schedule Of Weighted Average Number Of Shares Of Common Stock Used In Diluted Earnings (Loss) Per Share

		For the three months ended September 30,
(amounts in thousands, except for per share)		2015			2014
NUMERATOR:
Net (loss) income applicable to common stock before participating securities	$	(1,824	)	$	(1,336	)
Less: income applicable to participating securities (1)		-			-
Net (loss) income applicable to common stock	$	(1,824	)	$	(1,336	)
DENOMINATOR:
Weighted average shares outstanding - Basic and Diluted (2)		5,871			5,826
EPS:
Net (loss) income per share - Basic and Diluted	$	(0.31	)	$	(0.23	)

(1)	For the three months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities. As the participating securities do not participate in losses, there was no allocation of loss for the three months ended September 30, 2015 and 2014.
(2)	For the three months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

		For the nine months ended September 30,
(amounts in thousands, except for per share)		2015			2014
NUMERATOR:
Net (loss) income applicable to common stock before participating securities	$	(3,857	)	$	29,939
Less: income applicable to participating securities (1)		-			(1,174	)
Net (loss) income applicable to common stock	$	(3,857	)	$	28,765
DENOMINATOR:
Weighted average shares outstanding - Basic and Diluted (2)		5,853			5,802
EPS:
Net (loss) income per share - Basic and Diluted	$	(0.66	)	$	4.96

(1)	For the nine months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities. As the participating securities do not participate in losses, there was no allocation of loss for the nine months ended September 30, 2015.
(2)	For the nine months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

XML

Shareholders' Equity (Narrative) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2015	May. 14, 2015
Shareholders' Equity [Abstract]
Dividend declaration date	May 14, 2015
Special cash dividend, amount per share		$ 2.60
Dividend record date	Jun. 19, 2015
Percent of closing stock price		36.00%
Percent of dividend declared in a per share amount	20.00%

XML

Segment Information (Tables)

9 Months Ended

Sep. 30, 2015

Segment Information [Abstract]

Segment Reporting Information

For the three months ended September 30,
				2015							2014
	UC			Telephone		Consolidated			UC		Telephone		Consolidated
Operating Revenues	$	4,718	$	3,252	$	7,970		$	4,308	$	3,263	$	7,571
Operating Expenses
Cost of services and products		2,268		933		3,201			1,923		1,001		2,924
Selling, general and administrative expense		3,624		2,391		6,015			3,048		1,678		4,726
Loss on disposal, restructuring costs and other special
charges		-		-		-			336		264		600
Depreciation and amortization		529		362		891			546		385		931
Total Operating Expenses		6,421		3,686		10,107			5,853		3,328		9,181
Operating Loss		(1,703	)	(434	)	(2,137	)		(1,545	)	(65	)	(1,610	)
Interest income (expense), net						(2	)						20
Other income (expense), net						25							(4	)
Loss before income taxes				$		(2,114	)				$		(1,594	)

For the nine months ended September 30,
				2015							2014
	UC			Telephone		Consolidated			UC		Telephone		Consolidated
Operating Revenues	$	13,703	$	9,915	$	23,618		$	12,753	$	9,946	$	22,699
Operating Expenses
Cost of services and products		6,769		2,918		9,687			5,838		3,005		8,843
Selling, general and administrative expense		10,361		6,303		16,664			10,059		5,627		15,686
Loss on disposal, restructuring costs and other special
charges		-		-		-			392		308		700
Depreciation and amortization		2,256		1,127		3,383			1,606		1,147		2,753
Total Operating Expenses		19,386		10,348		29,734			17,895		10,087		27,982
Operating Loss		(5,683	)	(433	)	(6,116	)		(5,142	)	(141	)	(5,283	)
Interest income (expense), net						10							(173	)
Income from investment						-							52,373
Other income, net						1,515							23
(Loss) Income before income taxes				$		(4,591	)				$		46,940

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Nature Of Operations And Critical Accounting Policies And Estimates (Narrative) (Details)	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Significant Accounting Policies [Line Items]
Cost adjustment period	2 years
Company's Revenues [Member]
Significant Accounting Policies [Line Items]
Percentage of regulatory revenue	5.00%	3.00%
Customer Relationships [Member]
Significant Accounting Policies [Line Items]
Estimated useful life	8 years		8 years

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New Accounting Pronouncements

9 Months Ended

Sep. 30, 2015

New Accounting Pronouncements [Abstract]

New Accounting Pronouncements

NOTE 2: NEW ACCOUNTING PRONOUNCEMENTS

In May 2015, the Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), followed in July by ASU 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965): Part (I) Fully Benefit-Responsive Investment Contracts, Part (II) Plan Investment Disclosures, Part (III) Measurement Date Practical Expedient. These ASUs simplify or eliminate some of the financial statement reporting and disclosures that were previously required for employee benefit plans. ASU 2015-07 is effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years and requires retrospective presentation. Parts I and II of ASU 2015-12 are effective for fiscal years beginning after December 15, 2015, and require retrospective presentation. The Company expects the adoption of these standards will affect its employee benefit plan disclosures.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The update provides guidance on simplifying the presentation for debt issuance costs and debt discount and premium. The standard is effective for the annual and interim periods within those annual periods beginning after December 15, 2015. The Company does not expect the adoption of ASU 2015-03 to have a significant impact to the disclosure or balance sheet presentation in its consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern: Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. The update provides guidance that previously did not exist under US GAAP about a company's management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures, if applicable. The standard is effective for annual and interim periods within those annual periods beginning after December 15, 2016. Early adoption is permitted. The Company does not expect the adoption of ASU 2014-15 to have a significant impact to the disclosures in its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The update provides guidance on how to account for certain share-based payment awards where employees would be eligible to vest in the award regardless of whether the employee is still rendering service on the date the performance target is achieved. The standard is effective for annual and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The Company does not expect the adoption of ASU 2014-12 to have a material impact to its consolidated results of operations.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP. The guidance was originally effective for annual reporting periods beginning after December 15, 2016, and interim periods therein. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which defers the effective date to annual reporting periods beginning after December 15, 2017. Early adoption is permitted for annual reporting periods beginning after December 15, 2016. ASU 2014-09 can be adopted using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of adopting ASU 2014-09 on its consolidated financial statements and has not yet selected a transition method nor has it selected an adoption date. selected an adoption date.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-08 revised guidance to only allow disposals of components of an entity that represent a strategic shift (e.g., disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of an entity) and that have a major effect on a reporting entity's operations and financial results to be reported as discontinued operations. The revised guidance also requires expanded disclosure in the financial statements for discontinued operations, as well as for disposals of significant components of an entity that do not qualify for discontinued operations presentation. ASU 2014-08 is effective for interim and annual reporting periods beginning after December 15, 2014. The Company adopted ASU 2014-08 effective January 1, 2015 and the adoption did not have a significant impact on the Company's consolidated financial statement presentation.

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Seat Licenses And Other Intangible Assets (Components Of Other Intangible Assets) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Value	$ 7,895	$ 7,895
Accumulated Amortization	(3,513)	(2,875)
Net Value	$ 4,382	$ 5,020
Seat Licenses [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	5 years	5 years
Gross Value	$ 3,399	$ 2,936
Accumulated Amortization	(1,862)	(1,393)
Net Value	$ 1,537	$ 1,543
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	8 years	8 years
Gross Value	$ 5,400	$ 5,400
Accumulated Amortization	(2,812)	(2,306)
Net Value	$ 2,588	$ 3,094
Trade Name [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	15 years	15 years
Gross Value	$ 2,400	$ 2,400
Accumulated Amortization	(667)	(547)
Net Value	$ 1,733	$ 1,853
Website [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives	12 years	12 years
Gross Value	$ 95	$ 95
Accumulated Amortization	(34)	(22)
Net Value	$ 61	$ 73

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Stock Based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands		3 Months Ended	9 Months Ended
	Sep. 02, 2014 $ / shares shares	Sep. 30, 2015 USD ($) item shares	Sep. 30, 2015 USD ($) shares	Sep. 30, 2014 USD ($)	May. 14, 2015 $ / shares	Dec. 31, 2014 USD ($) shares	Aug. 25, 2014 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option or stock appreciation term, maximum			10 years
Share repurchase program, authorized amount | $							$ 3,000
Shares repurchased		902,000	902,000			885,000
Shares repurchased, value | $		$ 8,202	$ 8,202			$ 8,077
Special cash dividend, amount per share | $ / shares					$ 2.60
August 25, 2014 Share Repurchase Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchased		11,057	11,057
Shares repurchased, value | $		$ 100	$ 100
Series A Junior Participating Preferred Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of rights per share	1
Number of shares per right	0.001
Preferred shares, par value | $ / shares	$ 0.01
Purchase price per share | $ / shares	$ 22.20
Percentage of common stock needed to be acquired for rights to become exercisable	20.00%
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense | $			700	$ 700
Total fair value of vested restricted stock | $			800
Total unrecognized stock options compensation expense | $		$ 600	$ 600
Weighted average period of recognition for total unrecognized stock options compensation expense			2 years
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted			0
Long-Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for plan		1,100,000	1,100,000
Shares available for grant		382,198	382,198			420,392
Minimum exercise price per share of stock options as a percentage of grant date fair market value			100.00%
Stock-based compensation expense | $		$ 200
Number of changes to stock based compensation | item		2
Minimum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
Maximum [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years

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Condensed Consolidated Statements Of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating revenues:
Operating revenues	$ 7,970	$ 7,571	$ 23,618	$ 22,699
Operating expenses:
Cost of services and products (exclusive of depreciation and amortization expense)	3,201	2,924	9,687	8,843
Selling, general and administrative expenses	6,015	4,726	16,664	15,686
Depreciation and amortization	891	931	3,383	2,753
Restructuring costs and other special charges		600		700
Total operating expenses	10,107	9,181	29,734	27,982
Operating loss	(2,137)	(1,610)	(6,116)	(5,283)
Other income:
Interest (expense) income, net	(2)	20	10	(173)
Income from investment				52,373
Other income (expense), net	25	(4)	1,515	23
Total other income, net	23	16	1,525	52,223
(Loss) income before income taxes	(2,114)	(1,594)	(4,591)	46,940
Income tax (benefit) expense	(296)	(264)	(753)	16,982
Net (loss) income	(1,818)	(1,330)	(3,838)	29,958
Preferred dividends	6	6	19	19
Net (loss) income applicable to common stock	$ (1,824)	$ (1,336)	$ (3,857)	$ 29,939
Basic (loss) earnings per common share	$ (0.31)	$ (0.23)	$ (0.66)	$ 4.96
Diluted (loss) earnings per common share	$ (0.31)	$ (0.23)	$ (0.66)	$ 4.96
Weighted average shares of common stock used to calculate loss per common share:
Basic	5,871	5,826	5,853	5,802
Diluted	5,871	5,826	5,853	5,802
Dividends declared per common share			$ 2.60
Unified Communications [Member]
Operating revenues:
Operating revenues	$ 4,718	$ 4,308	$ 13,703	$ 12,753
Operating expenses:
Cost of services and products (exclusive of depreciation and amortization expense)	2,268	1,923	6,769	5,838
Selling, general and administrative expenses	3,624	3,048	10,361	10,059
Depreciation and amortization	529	546	2,256	1,606
Restructuring costs and other special charges		336		392
Total operating expenses	6,421	5,853	19,386	17,895
Operating loss	(1,703)	(1,545)	(5,683)	(5,142)
Telephone [Member]
Operating revenues:
Operating revenues	3,252	3,263	9,915	9,946
Operating expenses:
Cost of services and products (exclusive of depreciation and amortization expense)	933	1,001	2,918	3,005
Selling, general and administrative expenses	2,391	1,678	6,303	5,627
Depreciation and amortization	362	385	1,127	1,147
Restructuring costs and other special charges		264		308
Total operating expenses	3,686	3,328	10,348	10,087
Operating loss	$ (434)	$ (65)	$ (433)	$ (141)

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Shareholders' Equity (Summary Of The Changes To Shareholders' Equity) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Shareholders' Equity [Abstract]
Shareholders' equity, beginning of period			$ 40,156	$ 13,006
Net (loss) income	$ (1,818)	$ (1,330)	(3,838)	29,958
Dividends paid on common stock			(15,601)
Dividends paid on preferred stock			(19)	(19)
Stock based compensation			684	677
Treasury stock purchases			(125)	(399)
Changes in pension and postretirement benefit plans			782	410
Shareholders' equity, end of period	$ 22,039	$ 43,633	$ 22,039	$ 43,633

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Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income	$ (3,838)	$ 29,958
Adjustments to reconcile net (loss) income to net cash (used in) operating activities:
Depreciation and amortization	3,383	2,753
Stock based compensation expense	684	677
Distribution in excess of equity in earnings and gain on sale from equity investment		(49,776)
Other non-cash operating activities	(958)	230
Changes in assets and liabilities:
Trade accounts receivable	(182)	(269)
Prepaid expenses and other assets	(1,204)	(272)
Accounts payable and accrued expenses	731	922
Accrued taxes	(109)	4,029
Pension and postretirement benefit obligations	775	139
Net cash (used in) operating activities	(718)	(11,609)
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures	(688)	(222)
Purchase of seat licenses and other intangibles	(62)	(115)
Proceeds from sale of assets		33
Proceeds received in excess of income from equity investments		49,776
Net cash (used in) provided by investing activities	(750)	49,472
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from debt		2,443
Repayments of debt and capital leases	(363)	(12,575)
Purchase of treasury stock	(125)	(399)
Dividends (Common and Preferred)	(15,620)	(19)
Net cash used in financing activities	(16,108)	(10,550)
Net change in cash and cash equivalents	(17,576)	27,313
Cash and cash equivalents at beginning of period	24,047	1,636
Cash and cash equivalents at end of period	6,471	28,949
Supplemental disclosure of non-cash investing activities:
Acquisition of equipment and seat licenses under capital leases	368	390
Seat licenses acquired, but not paid	$ 291	$ 188

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Debt Obligations (Narrative) (Details) - Demand Line Of Credit [Member] - USD ($)	Sep. 30, 2015	Nov. 07, 2014
Line of Credit Facility [Line Items]
Credit facility, amount available		$ 5,000,000
Outstanding Line of Credit balance	$ 0

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Nature Of Operations And Critical Accounting Policies And Estimates (Policy)

9 Months Ended

Sep. 30, 2015

Nature Of Operations And Critical Accounting Policies And Estimates [Abstract]

Basis Of Presentation

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial information, with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year or any other future period. The consolidated balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated. The interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

Use Of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Significant estimates include, but are not limited to, depreciation and amortization expense, allowance for doubtful accounts, long-lived assets, pension and postretirement expenses, and income taxes. Actual results could differ from those estimates.

Revenue Recognition

Revenue Recognition

The Company derives its revenue from the sale of UC services as well as traditional telephone services.

The Company recognizes revenue when (i) persuasive evidence of an arrangement between the Company and the customer exists, (ii) the delivery of the product to the customer has occurred or service has been provided to the customer, (iii) the price to the customer is fixed or determinable, and (iv) collectability of the sales or service price is reasonably assured. Revenue is reported net of all applicable sales tax.

UC

The Company's UC services and solutions consist primarily of its hosted VoIP UC system, certain UC applications, and other professional services associated with the installation and activation. Additionally, the Company offers customers the ability to purchase telephone equipment from the Company directly or independently from external vendors.

Multiple element arrangements primarily include the sale of telephone equipment, along with professional services associated with installation, activation and implementation services, as well as follow on hosting services. The Company has concluded that the separate units of accounting in these arrangements consist of (i) the telephone equipment sale and (ii) the professional services provided combined with the follow on hosting services. The professional services provided do not constitute a separate unit of accounting as they do not have value to the customer on a stand-alone basis. Arrangement consideration is allocated to the separate units of accounting based on the relative selling price. The selling price for telephone equipment is based on third-party evidence representing list prices for similar equipment when sold a stand-alone basis. The selling price for professional and hosting services is based on the Company's best estimate of selling price ("BESP"). The Company develops its BESP by considering pricing practices, margin, competition and overall market trends.

The Company bills a portion of its monthly recurring hosted service revenue a month in advance. Any amounts billed and collected, but for which the service is not yet delivered, are included in deferred revenue. These amounts are recognized as revenues only when the service is delivered.

Equipment sales associated with the sale of telephone equipment is recognized upon delivery to the customer, as it is considered to be a separate earnings process. The sales are recognized on a gross basis, as the Company is considered the primary obligor in customer transactions among other considerations. Other upfront fees, excluding equipment, along with associated costs, up to but not exceeding these fees, are deferred and recognized over the estimated life of the customer relationship. The Company has estimated its customer relationship life at eight years and evaluates it periodically for continued appropriateness.

Telephone

Revenue is earned from monthly billings to customers for local voice services, long distance, DSL, Internet services, hardware and other services. Revenue is also derived from charges for network access to the local exchange telephone network from subscriber line charges and from contractual arrangements for services such as billing and collection and directory advertising. Revenue is recognized in the period in which service is provided to the customer. Directory advertising revenue is recorded ratably over the life of the directory. With multiple billing cycles, the Company accrues revenue earned but not yet billed at the end of a quarter. The Company also defers services billed in advance and recognizes them as income when earned.

The Telephone segment markets competitive service bundles which may include multiple deliverables. The base bundles consist of voice services (including a business or residential phone line), calling features and long distance services and customers may choose to add internet services to a base bundle package. Separate units of accounting within the bundled packages include voice services, long distance and Internet services. Revenue for all services included in bundles is recognized over the same service period, which is the time period in which the service is provided to the customer.

Certain revenue is realized under pooling arrangements with other service providers and is divided among the companies based on respective costs and investments to provide the services. The companies that take part in pooling arrangements may adjust their costs and investments for a period of two years, which causes the funds distributed by the pool to be adjusted retroactively. The Company believes that recorded amounts represent reasonable estimates of the final distribution from these pools. However, to the extent that the companies participating in these pools make adjustments, there will be corresponding adjustments to the Company's recorded revenue in future periods.

Revenue from these pooling arrangements which includes Universal Service Funds ("USF") and National Exchange Carrier Association ("NECA") pool settlements, accounted for 5% and 3% of the Company's consolidated revenues for the nine months ended September 30, 2015 and 2014, respectively.

Materials And Supplies

Materials and Supplies

The Company's materials and supplies are carried at average cost, net of reserves for obsolescence, and consist principally of telephone equipment, telephone pole and wiring spare parts and other ancillary equipment for resale.

Fair Value

Fair Value

Fair value is the estimated price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company is required by accounting standards to provide the disclosure framework for measuring fair value and expanded disclosure about fair value measurements. Fair value measurements are classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: These are inputs, other than quoted prices that are included in Level 1, which are observable in the marketplace throughout the term of the assets or liabilities, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price of an acquired business over the net fair value of identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but rather is assessed for impairment at least annually. The Company tests goodwill for impairment at the reporting unit level annually on December 31, or whenever events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. If it is determined that an impairment has occurred, the Company records a write down of the carrying value and records the charge for the impairment as an operating expense during the period in which the determination is made. The Company has determined that its operating segments are the applicable reporting units because they are the lowest level at which discrete, reliable financial and cash flow information is regularly reviewed by segment management.

The Company only has goodwill that is associated with its UC segment, resulting from the purchase of certain assets and certain liabilities of Alteva, LLC in 2011. The Company is not aware of any events or circumstances that occurred during the nine months ended September 30, 2015 that would have more likely than not reduced the fair value of this reporting unit below its carrying value.

Income Taxes

Income Taxes

The Company records deferred taxes that arise from temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred tax assets and deferred tax liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. The Company's deferred taxes result principally from differences in the timing of depreciation, in the accounting for pensions and other postretirement benefits, and state net operating loss carryforwards.

The process of providing for income taxes and determining the related balance sheet accounts requires management to assess uncertainties, make judgments regarding outcomes and utilize estimates. Management must make judgments currently about such uncertainties and determine estimates of the Company's tax assets and liabilities. To the extent the final outcome differs, future adjustments to the Company's tax assets and liabilities may be necessary.

The Company assesses the realizability of its deferred tax assets, taking into consideration future reversals of existing temporary differences, the Company's forecast of future taxable income, and available tax planning strategies that could be implemented to realize the deferred tax assets. Based on this assessment, management must evaluate the need for, and the amount of, valuation allowances against the Company's deferred tax assets. To the extent facts and circumstances change in the future, adjustments to the valuation allowances may be required.

Accounting for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be paid within one year. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense.

Stock-Based Compensation

Stock-Based Compensation

The Company measures the cost of employee services received in exchange for the award of an equity instrument based on the grant-date fair value of the award, with such cost recognized over the applicable vesting period.

Accounting Policies

Accounting Policies

There were no material changes to the Company's other accounting policies as presented in Item 8 of its Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

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Debt Obligations (Schedule Of Debt Obligations) (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Debt Obligations [Abstract]
Short-term debt	$ 405	$ 325
Capital leases and other borrowings	403	295
Total debt obligations	$ 808	$ 620

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Orange County-Poughkeepsie Limited Partnership (Tables)

9 Months Ended

Sep. 30, 2015

Orange County-Poughkeepsie Limited Partnership [Abstract]

Summarized O-P Income Statement Information

	For the nine months
	ended
($ in thousands)	September 30, 2014
Net sales	$	170,746
Cellular service cost		80,051
Operating expenses		44,726
Operating income		45,969
Other income		62
Net income	$	46,031
Company's share	$	2,597

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Nature Of Operations And Critical Accounting Policies And Estimates

9 Months Ended

Sep. 30, 2015

Nature Of Operations And Critical Accounting Policies And Estimates [Abstract]

Nature Of Operations And Critical Accounting Policies And Estimates

NOTE 1: NATURE OF OPERATIONS AND CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Nature of Operations

Alteva, Inc. ("Alteva" or the "Company") is a cloud-based communications company that provides Unified Communications ("UC") solutions, including enterprise hosted Voice over Internet Protocol ("VoIP") and operates as a regional Incumbent Local Exchange Carrier ("ILEC") in southern Orange County, New York and northern New Jersey. Unless otherwise indicated or unless the context requires, all references to the Company means the Company and its wholly-owned subsidiaries. The Company delivers cloud-based UC solutions including BroadSoft-based VoIP integrated with Microsoft Lync, Microsoft Exchange, Google Apps for Business, leading customer relationship management ("CRM") applications such as Salesforce.com and Bring-Your-Own-Device ("BYOD") solutions for Mobility, which allows users to take advantage of all of the features available to them no matter where they are located or what device they are using. The Company's ILEC operations consist of providing local and toll telephone service to residential and business customers, Internet high-speed broadband service, and satellite television services provided by DIRECTV®.

Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") for interim financial information, with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company's management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The operating results for the interim periods are not necessarily indicative of the results that may be expected for the entire year or any other future period. The consolidated balance sheet as of December 31, 2014 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated. The interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Significant estimates include, but are not limited to, depreciation and amortization expense, allowance for doubtful accounts, long-lived assets, pension and postretirement expenses, and income taxes. Actual results could differ from those estimates.

Revenue Recognition

The Company derives its revenue from the sale of UC services as well as traditional telephone services.

The Company recognizes revenue when (i) persuasive evidence of an arrangement between the Company and the customer exists, (ii) the delivery of the product to the customer has occurred or service has been provided to the customer, (iii) the price to the customer is fixed or determinable, and (iv) collectability of the sales or service price is reasonably assured. Revenue is reported net of all applicable sales tax.

UC

The Company's UC services and solutions consist primarily of its hosted VoIP UC system, certain UC applications, and other professional services associated with the installation and activation. Additionally, the Company offers customers the ability to purchase telephone equipment from the Company directly or independently from external vendors.

Multiple element arrangements primarily include the sale of telephone equipment, along with professional services associated with installation, activation and implementation services, as well as follow on hosting services. The Company has concluded that the separate units of accounting in these arrangements consist of (i) the telephone equipment sale and (ii) the professional services provided combined with the follow on hosting services. The professional services provided do not constitute a separate unit of accounting as they do not have value to the customer on a stand-alone basis. Arrangement consideration is allocated to the separate units of accounting based on the relative selling price. The selling price for telephone equipment is based on third-party evidence representing list prices for similar equipment when sold a stand-alone basis. The selling price for professional and hosting services is based on the Company's best estimate of selling price ("BESP"). The Company develops its BESP by considering pricing practices, margin, competition and overall market trends.

The Company bills a portion of its monthly recurring hosted service revenue a month in advance. Any amounts billed and collected, but for which the service is not yet delivered, are included in deferred revenue. These amounts are recognized as revenues only when the service is delivered.

Equipment sales associated with the sale of telephone equipment is recognized upon delivery to the customer, as it is considered to be a separate earnings process. The sales are recognized on a gross basis, as the Company is considered the primary obligor in customer transactions among other considerations. Other upfront fees, excluding equipment, along with associated costs, up to but not exceeding these fees, are deferred and recognized over the estimated life of the customer relationship. The Company has estimated its customer relationship life at eight years and evaluates it periodically for continued appropriateness.

Telephone

Revenue is earned from monthly billings to customers for local voice services, long distance, DSL, Internet services, hardware and other services. Revenue is also derived from charges for network access to the local exchange telephone network from subscriber line charges and from contractual arrangements for services such as billing and collection and directory advertising. Revenue is recognized in the period in which service is provided to the customer. Directory advertising revenue is recorded ratably over the life of the directory. With multiple billing cycles, the Company accrues revenue earned but not yet billed at the end of a quarter. The Company also defers services billed in advance and recognizes them as income when earned.

The Telephone segment markets competitive service bundles which may include multiple deliverables. The base bundles consist of voice services (including a business or residential phone line), calling features and long distance services and customers may choose to add internet services to a base bundle package. Separate units of accounting within the bundled packages include voice services, long distance and Internet services. Revenue for all services included in bundles is recognized over the same service period, which is the time period in which the service is provided to the customer.

Certain revenue is realized under pooling arrangements with other service providers and is divided among the companies based on respective costs and investments to provide the services. The companies that take part in pooling arrangements may adjust their costs and investments for a period of two years, which causes the funds distributed by the pool to be adjusted retroactively. The Company believes that recorded amounts represent reasonable estimates of the final distribution from these pools. However, to the extent that the companies participating in these pools make adjustments, there will be corresponding adjustments to the Company's recorded revenue in future periods.

Revenue from these pooling arrangements which includes Universal Service Funds ("USF") and National Exchange Carrier Association ("NECA") pool settlements, accounted for 5% and 3% of the Company's consolidated revenues for the nine months ended September 30, 2015 and 2014, respectively.

Materials and Supplies

The Company's materials and supplies are carried at average cost, net of reserves for obsolescence, and consist principally of telephone equipment, telephone pole and wiring spare parts and other ancillary equipment for resale.

Fair Value

Fair value is the estimated price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company is required by accounting standards to provide the disclosure framework for measuring fair value and expanded disclosure about fair value measurements. Fair value measurements are classified and disclosed in one of the following categories:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. The Company considers active markets as those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: These are inputs, other than quoted prices that are included in Level 1, which are observable in the marketplace throughout the term of the assets or liabilities, can be derived from observable data, or supported by observable levels at which transactions are executed in the marketplace.

Level 3: Measured based on prices or valuation models that require inputs that are both significant to the fair value measurement and less observable from objective sources (i.e. supported by little or no market activity). The Company does not have sufficient corroborating evidence to support classifying these assets and liabilities as Level 1 or Level 2.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

Goodwill

Goodwill represents the excess of the purchase price of an acquired business over the net fair value of identifiable assets acquired and liabilities assumed. Goodwill is not amortized, but rather is assessed for impairment at least annually. The Company tests goodwill for impairment at the reporting unit level annually on December 31, or whenever events or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. If it is determined that an impairment has occurred, the Company records a write down of the carrying value and records the charge for the impairment as an operating expense during the period in which the determination is made. The Company has determined that its operating segments are the applicable reporting units because they are the lowest level at which discrete, reliable financial and cash flow information is regularly reviewed by segment management.

The Company only has goodwill that is associated with its UC segment, resulting from the purchase of certain assets and certain liabilities of Alteva, LLC in 2011. The Company is not aware of any events or circumstances that occurred during the nine months ended September 30, 2015 that would have more likely than not reduced the fair value of this reporting unit below its carrying value.

Income Taxes

The Company records deferred taxes that arise from temporary differences between the financial statement and the tax basis of assets and liabilities. Deferred taxes are classified as current or non-current, depending on the classification of the assets and liabilities to which they relate. Deferred tax assets and deferred tax liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment. The Company's deferred taxes result principally from differences in the timing of depreciation, in the accounting for pensions and other postretirement benefits, and state net operating loss carryforwards.

The process of providing for income taxes and determining the related balance sheet accounts requires management to assess uncertainties, make judgments regarding outcomes and utilize estimates. Management must make judgments currently about such uncertainties and determine estimates of the Company's tax assets and liabilities. To the extent the final outcome differs, future adjustments to the Company's tax assets and liabilities may be necessary.

The Company assesses the realizability of its deferred tax assets, taking into consideration future reversals of existing temporary differences, the Company's forecast of future taxable income, and available tax planning strategies that could be implemented to realize the deferred tax assets. Based on this assessment, management must evaluate the need for, and the amount of, valuation allowances against the Company's deferred tax assets. To the extent facts and circumstances change in the future, adjustments to the valuation allowances may be required.

Accounting for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be paid within one year. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense.

Stock-Based Compensation

The Company measures the cost of employee services received in exchange for the award of an equity instrument based on the grant-date fair value of the award, with such cost recognized over the applicable vesting period.

Accounting Policies

There were no material changes to the Company's other accounting policies as presented in Item 8 of its Annual Report on Form 10-K, as amended, for the year ended December 31, 2014.

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Condensed Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net (loss) income	$ (1,818)	$ (1,330)	$ (3,838)	$ 29,958
Other comprehensive income (loss): Defined benefit pension plans:
Amortization of prior service costs	3	(35)	8	(105)
Amortization of actuarial loss	258	148	774	515
Other comprehensive income	261	113	782	410
Comprehensive (loss) income	$ (1,557)	$ (1,217)	$ (3,056)	$ 30,368

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Segment Information

9 Months Ended

Sep. 30, 2015

Segment Information [Abstract]

Segment Information

NOTE 11: SEGMENT INFORMATION

The Companys two segments, UC and Telephone, are strategic business units that offer different products and services. The Company evaluates the performance of its two segments based upon factors such as revenue growth, expense containment, market share and operating results.

The UC segment is a premier provider of hosted Unified Communications as a Service (UCaaS) including VoIP, hosted Microsoft communication services, fixed mobile convergence and advanced voice applications for a broad customer base including, medium and large-sized businesses and enterprise business customers.

The Telephone segment operates as an ILEC in southern Orange County, New York and northern New Jersey. The Telephone segment consists of providing local and toll telephone service, high-speed broadband and fiber Internet access services and satellite video services to residential and business customers. The ILEC service areas are primarily rural and have an estimated population of 50,000. We also operate as a CLEC in Middletown, New York, Scotchtown, New York and Vernon, New Jersey.

The segment results presented below are not necessarily indicative of the results of operations these segments would have achieved had they operated as stand-alone entities during the periods presented. All intersegment transactions are shown net of eliminations.

Segment statement of operations information for the three months ended September 30, 2015 and 2014 is set forth below:

				For the three months ended September 30,
				2015							2014
	UC			Telephone		Consolidated			UC		Telephone		Consolidated
Operating Revenues	$	4,718	$	3,252	$	7,970		$	4,308	$	3,263	$	7,571
Operating Expenses
Cost of services and products		2,268		933		3,201			1,923		1,001		2,924
Selling, general and administrative expense		3,624		2,391		6,015			3,048		1,678		4,726
Loss on disposal, restructuring costs and other special
charges		-		-		-			336		264		600
Depreciation and amortization		529		362		891			546		385		931
Total Operating Expenses		6,421		3,686		10,107			5,853		3,328		9,181
Operating Loss		(1,703	)	(434	)	(2,137	)		(1,545	)	(65	)	(1,610	)
Interest income (expense), net						(2	)						20
Other income (expense), net						25							(4	)
Loss before income taxes				$		(2,114	)				$		(1,594	)

Segment statement of operations information for the nine months ended September 30, 2015 and 2014 is set forth below:

				For the nine months ended September 30,
				2015							2014
	UC			Telephone		Consolidated			UC		Telephone		Consolidated
Operating Revenues	$	13,703	$	9,915	$	23,618		$	12,753	$	9,946	$	22,699
Operating Expenses
Cost of services and products		6,769		2,918		9,687			5,838		3,005		8,843
Selling, general and administrative expense		10,361		6,303		16,664			10,059		5,627		15,686
Loss on disposal, restructuring costs and other special
charges		-		-		-			392		308		700
Depreciation and amortization		2,256		1,127		3,383			1,606		1,147		2,753
Total Operating Expenses		19,386		10,348		29,734			17,895		10,087		27,982
Operating Loss		(5,683	)	(433	)	(6,116	)		(5,142	)	(141	)	(5,283	)
Interest income (expense), net						10							(173	)
Income from investment						-							52,373
Other income, net						1,515							23
(Loss) Income before income taxes				$		(4,591	)				$		46,940

The assets for the UC segment decreased during the nine months ended September 30, 2015 primarily as a result of accelerated depreciation/amortization of office equipment and leasehold improvements associated with the exit of the office lease (see Note 13).

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Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 05, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Registrant Name	ALTEVA, INC.
Entity Central Index Key	0000104777
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,981,352

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2015

Commitments And Contingencies [Abstract]

Commitments And Contingencies

NOTE 12: COMMITMENTS AND CONTINGENCIES

The Company is party, from time to time, to various legal proceedings, including patent infringement claims, regulatory investigations and tax examinations incidental to its business. The Company continually monitors these legal proceedings, regulatory investigations and tax examinations to determine the impact and any required accruals.

On March 31, 2014, David J. Cuthbert was terminated as President and Chief Executive Officer of Alteva. The Company notified Mr. Cuthbert that his termination was for cause and, as such, Mr. Cuthbert was not entitled to any of the benefits provided for under his employment agreement dated March 5, 2013, including cash severance and the acceleration of vesting on any unvested equity instruments. Mr. Cuthbert disputed the Companys basis for termination and claimed that he was due his full severance benefits. As the Company did not want to incur further legal fees or the risk of distraction of a protracted legal dispute, on October 16, 2014, the Company, through mediation, entered into a settlement agreement and mutual release agreement (the Settlement Agreement) with Mr. Cuthbert. In consideration for Mr. Cuthberts execution of the Settlement Agreement, the Company agreed to pay to Mr. Cuthbert the amount of $0.75 million less certain taxes and withholdings, which was accrued for and reported in the statement of operations under restructuring costs and other special charges, less insurance proceeds, for the nine months ended September 30, 2014. The settlement agreement was paid out on October 28, 2014.

During the year ended December 31, 2014, the Company was named as a party to a lawsuit from Sprint regarding a certain tariff charge (IntraMTA carrier charge) billed by Alteva, paid by Sprint over a number of years that had not previously been disputed. Sprint has filed similar lawsuits against other carriers related to the same tariff charges. The Company has filed a motion to dismiss. The amount of the claim filed by Sprint is for $0.2 million; however the Company has not been able to substantiate the basis for the claim amount and therefore, has not recorded an accrual as of September 30, 2015.

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 6,471	$ 24,047
Trade accounts receivable - net of allowance for uncollectibles - $421 and $402 at September 30, 2015 and December 31, 2014, respectively	2,919	2,737
Other accounts receivable	598	488
Materials and supplies	273	167
Prepaid expenses	703	349
Prepaid income taxes	498	311
Receivable and deferred income taxes	1,190	43
Total current assets	12,652	28,142
Property, plant and equipment, net	11,050	12,384
Intangibles, net	4,382	5,020
Seat licenses, net	1,537	1,543
Goodwill	9,006	9,006
Other assets	1,474	1,023
Total assets	40,101	57,118
Current liabilities:
Short-term debt	405	325
Accounts payable	1,317	1,216
Advance billing and payments	317	274
Accrued taxes	947	1,056
Pension and postretirement benefit obligations	276	276
Accrued wages	914	1,036
Deferred revenue	857	705
Other accrued expenses	2,792	2,180
Total current liabilities	7,825	7,068
Long-term debt	403	295
Payable and deferred income taxes	1,008	766
Pension and postretirement benefit obligations	8,826	8,833
Total liabilities	18,062	16,962
Shareholders' equity
Preferred shares - $100 par value; authorized and issued shares of 5; $0.01 par value; authorized and unissued shares of 10,000	500	500
Common stock - $0.01 par value; authorized shares of 10,000; issued 6,903 and 6,826 shares issued at September 30, 2015 and December 31, 2014, respectively	69	69
Treasury stock - at cost, 902 and 885 common shares at September 30, 2015 and December 31, 2014, respectively	(8,202)	(8,077)
Additional paid in capital	14,731	14,047
Accumulated other comprehensive loss	(3,215)	(3,997)
Retained earnings	18,156	37,614
Total shareholders' equity	22,039	40,156
Total liabilities and shareholders' equity	$ 40,101	$ 57,118

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Taxes [Abstract]

Income Taxes

NOTE 6: INCOME TAXES

The effective tax rate for the nine months ended September 30, 2015, and September 30, 2014 was 18% and 36%, respectively. We determined our interim tax provision by developing an estimate of the annual effective tax rate and applying such rate to interim pre-tax results. The estimated rate includes projections of tax expense on the expected increase in our valuation allowance for deferred tax assets. The estimated effective tax rate differed from the U.S. statutory rate primarily due to the expected increase in the valuation allowance, which reduced the overall tax benefit recorded for the period ended September 30, 2015.

As of September 30, 2015 and December 31, 2014, the Company carried a full valuation allowance against its deferred tax assets because management determined that it was not more likely than not that it would realize the benefits of such deferred tax assets. The Company maintains a deferred tax liability related to indefinite lived intangibles.

Accounting for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be paid within one year. The Company has concluded that there are no material uncertain tax positions requiring recognition in its consolidated financial statements as of September 30, 2015 and December 31, 2014.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense. For the nine months ended September 30, 2015 and 2014, the interest expense relating to unrecognized tax benefits was not material.

The Company and its subsidiaries file a U.S. federal consolidated income tax return. The U.S. federal statute of limitations remains open for the years 2011 and thereafter. State income tax returns are generally subject to examination for a period of 3 to 5 years after filing the respective return. The impact of any federal changes on state returns remains subject to examination by the relevant states for a period of up to one year after formal notification to the states.

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Debt Obligations

9 Months Ended

Sep. 30, 2015

Debt Obligations [Abstract]

Debt Obligations

NOTE 5: DEBT OBLIGATIONS

Debt obligations consisted of the following at September 30, 2015 and December 31, 2014:

		As of
($ in thousands)		September 30, 2015		December 31, 2014
Short-term debt:
Capital leases and other borrowings, current portion	$	405	$	325
Long-term debt:
Capital leases and other borrowings		403		295
Total debt obligations	$	808	$	620

On November 7, 2014, the Company entered into a demand line of credit with TriState (the Demand Line of Credit) to allow for borrowings up to $5.0 million. The Company borrows or repays its debt as needed based upon its working capital obligations. It is up to the discretion of TriState to approve borrowings within the allowed line of credit limit and TriState may, at any time, demand that the Company make payment on an outstanding balance. There are no financial covenants under the Demand Line of Credit. As of September 30, 2015, the Company did not have any outstanding balance under the Demand Line of Credit.

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Seat Licenses And Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2015

Finite-Lived Intangible Assets [Line Items]

Components Of Other Intangible Assets

	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of September 30, 2015
Customer relationships	8 years	$	5,400	$	(2,812	)	$	2,588
Trade name	15 years		2,400		(667	)		1,733
Website	12 years		95		(34	)		61
Total		$	7,895	$	(3,513	)	$	4,382
	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of December 31, 2014
Customer relationships	8 years	$	5,400	$	(2,306	)	$	3,094
Trade name	15 years		2,400		(547	)		1,853
Website	12 years		95		(22	)		73
Total		$	7,895	$	(2,875	)	$	5,020

Seat Licenses [Member]

Finite-Lived Intangible Assets [Line Items]

Components Of Other Intangible Assets

	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of September 30, 2015
Seat licenses	5 years	$	3,399	$	(1,862	)	$	1,537
	Estimated		Gross		Accumulated			Net
($ in thousands)	Useful Lives		Value		Amortization			Value
As of December 31, 2014
Seat licenses	5 years	$	2,936	$	(1,393	)	$	1,543

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Office Relocation

9 Months Ended

Sep. 30, 2015

Office Relocation [Abstract]

Office Relocation

NOTE 13:

OFFICE RELOCATION

In February 2015, the Company entered into an agreement to terminate the lease for its corporate headquarters in Philadelphia, PA. As part of this agreement, the Company was entitled to receive a payment of $1.5 million as long as the Company vacated the facility by May 18, 2015. The Company vacated the facility on May 17, 2015 and received payment on June 22, 2015. In connection with the lease termination, the Company has recognized other income of $1.5 million during the nine months ended September 30, 2015 in the statement of operations. The Company depreciated the remaining net book value of the leasehold improvements and furniture and fixtures associated with the old headquarters, and recognize the remaining deferred rent liability through the move date of May 17, 2015. The statement of operations includes accelerated depreciation of zero and $0.8 million for the three and nine months ended September 30, 2015 reported in depreciation and amortization, respectively, as well as accelerated deferred rent of zero and $0.4 million for the three and nine months ended September 30, 2015, reported in selling, general and administrative expenses in the UC Segment, respectively.

In connection with the lease termination, the Company entered into a lease for a new corporate headquarters in Philadelphia, PA dated February 27, 2015. The terms of the lease are for 10 full years with minimum rental payments of $0.4 million for the first full twelve month period, escalating by 2.5% each year thereafter. The first full twelve month period began on June 1, 2015 since the Company began operating from the new location on May 18, 2015. Per the agreement, the Company paid a per diem rate from the date it begins operating from the new location until the first day of the first full month.

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Earnings (Loss) Per Share

9 Months Ended

Sep. 30, 2015

Earnings (Loss) Per Share [Abstract]

Earnings (Loss) Per Share

NOTE 9: EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per share is computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing net income (loss) applicable to common stock by the weighted average number of shares of common stock adjusted to include the effect of potentially dilutive securities. Potentially dilutive securities include incremental shares issuable upon exercise of outstanding stock options and shares of unvested restricted stock. Diluted earnings (loss) per share exclude all dilutive securities if their effect is anti-dilutive.

The Companys restricted stock awards are considered participating securities because they contain non-forfeitable rights to dividends. Under the two-class method, earnings per share (EPS) is computed by dividing earnings allocated to common shareholders by the weighted-average number of common shares outstanding for the period. In applying the two-class method, earnings are allocated to both shares of common stock and participating securities based on their respective weighted-average shares outstanding for the period.

For the three and nine months ended September 30, 2015, the Company experienced a net loss. As a result, the effect of participating securities was excluded from the computation of basic and diluted EPS. The net losses were not allocated because the restricted stockholders are not required to fund losses.

The weighted average number of shares of common stock used in basic and diluted earnings per share for the three and nine months ended September 30, 2015 and 2014 was as follows:

		For the three months ended September 30,
(amounts in thousands, except for per share)		2015			2014
NUMERATOR:
Net (loss) income applicable to common stock before participating securities	$	(1,824	)	$	(1,336	)
Less: income applicable to participating securities (1)		-			-
Net (loss) income applicable to common stock	$	(1,824	)	$	(1,336	)
DENOMINATOR:
Weighted average shares outstanding - Basic and Diluted (2)		5,871			5,826
EPS:
Net (loss) income per share - Basic and Diluted	$	(0.31	)	$	(0.23	)

(1)	For the three months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities. As the participating securities do not participate in losses, there was no allocation of loss for the three months ended September 30, 2015 and 2014.
(2)	For the three months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

		For the nine months ended September 30,
(amounts in thousands, except for per share)		2015			2014
NUMERATOR:
Net (loss) income applicable to common stock before participating securities	$	(3,857	)	$	29,939
Less: income applicable to participating securities (1)		-			(1,174	)
Net (loss) income applicable to common stock	$	(3,857	)	$	28,765
DENOMINATOR:
Weighted average shares outstanding - Basic and Diluted (2)		5,853			5,802
EPS:
Net (loss) income per share - Basic and Diluted	$	(0.66	)	$	4.96

(1)	For the nine months ended September 30, 2015 and 2014, the Company had 0.1 million and 0.2 million, respectively in nonvested participating securities. As the participating securities do not participate in losses, there was no allocation of loss for the nine months ended September 30, 2015.
(2)	For the nine months ended September 30, 2015 and 2014, potentially dilutive shares related to out of the money common stock options that were excluded from EPS, as their effect was anti-dilutive, were nominal.

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Pension Plans And Postretirement Obligations

9 Months Ended

Sep. 30, 2015

Pension Plans And Postretirement Obligations [Abstract]

Pension Plans And Postretirement Obligations

NOTE 7: PENSION AND POSTRETIREMENT OBLIGATIONS

The components of net periodic cost (benefit) for the three months ended September 30, 2015 and 2014 are as follows:

		Pension Benefits						Postretirement Benefits
		For the three months ended						For the three months ended
($ in thousands)		September 30, 2015		September 30, 2014				September 30, 2015		September 30, 2014
Interest cost	$	195		$	191		$	24		$	30
Expected return on plan assets		(195	)		(228	)		7			(6	)
Amortization of prior service cost		14			14			(11	)		(49	)
Recognized actuarial loss		237			142			21			6
Net periodic benefit cost (benefit)	$	251		$	119		$	41		$	(19	)

The components of net periodic cost (benefit) for the nine months ended September 30, 2015 and 2014 are as follows

	Pension Benefits						Postretirement Benefits
	For the nine months ended						For the nine months ended
($ in thousands)		September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Interest cost	$	586		$	604		$	73		$	89
Expected return on plan assets		(586	)		(669	)		21			(15	)
Amortization of prior service cost		42			42			(34	)		(147	)
Recognized actuarial loss		711			497			63			18
Net periodic benefit cost (benefit)	$	753		$	474		$	123		$	(55	)

For the nine months ended September 30, 2015 and September 30, 2014, the Company has contributed $0.1 million and $0.2 million, respectively, to its pension and postretirement benefits plans. The amortization of prior service cost and recognized actuarial loss included in pension and postretirement expense represent reclassifications out of other comprehensive income (loss).

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Stock Based Compensation

9 Months Ended

Sep. 30, 2015

Stock Based Compensation [Abstract]

Stock Based Compensation

NOTE 8: STOCK BASED COMPENSATION

The Company has a shareholder approved long-term incentive plan (the LTIP) to assist the Company and its affiliates in attracting, motivating and retaining selected individuals to serve as employees, directors, consultants and advisors of the Company and its affiliates by providing incentives to such individuals through the ownership and performance of the Companys common stock. There are 1.1 million shares of common stock authorized for issuance under the LTIP. Shares available for grant under the LTIP may be authorized and unissued shares or shares that have been reacquired by the Company and are designated as treasury shares. As of September 30, 2015 and December 31, 2014, 382,198 and 420,392 shares of the Companys common stock were available for grant under the LTIP. The LTIP permits the issuance by the Company of awards in the form of stock options, stock appreciation rights, restricted stock and restricted stock units and performance shares. The exercise price per share of the Companys common stock purchasable under any stock option or stock appreciation right may not be less than 100% of the fair market value of one share of common stock on the date of grant. The term of any stock option or stock appreciation right may not exceed ten years. The LTIP also provides plan participants with a cashless mechanism to exercise their stock options. Issued restricted stock, stock options and restricted stock units are subject to vesting restrictions.

On August 21, 2015, the Compensation Committee of the Board of Directors of the Company (the "Committee") approved amendments to the vesting terms of unvested equity grants for all employees with outstanding grants under the LTIP. All existing employee equity grant award agreements were amended to provide that all such awards vest immediately upon a change in control of the Company. On the same day, the Committee took further action so that all awarded, but unvested restricted stock of non-employee directors vested effective as of the close of business on Monday, August 24, 2015. As a result of these two changes, the Company recorded an additional $0.2 million in compensation expense during the third quarter of 2015 relating to the accelerated vesting for the three and nine months ended September 30, 2015.

Restricted Stock Awards

Stock-based compensation expense for restricted stock awards was $0.7 million and $0.7 million for the nine months ended September 30, 2015 and 2014, respectively, and was recorded within selling, general, and administrative expenses. Restricted stock awards are amortized over their respective vesting periods of two or three years. The Company records stock-based compensation for grants of restricted stock awards on a straight-line basis.

The following table summarizes the restricted common stock activity for the nine months ended September 30, 2015:

	For the nine months ended
	September 30, 2015
				Weighted
				Average Fair
	Shares			Value
Balance - nonvested at December 31, 2014	124,578		$	9.84
Granted	80,452			7.37
Vested	(91,262	)		9.27
Forfeited	(3,365	)		9.94
Balance - nonvested at September 30, 2015	110,403		$	8.52

The total grant-date fair value of restricted stock vested for the nine months ended September 30, 2015 was $0.8 million. As of September 30, 2015, $0.6 million of total unrecognized compensation expense related to restricted common stock is expected to be recognized over a weighted average period of approximately 2.0 years.

Stock Options

The following tables summarize stock option activity for the nine months ended September 30, 2015, along with stock options exercisable at the end of the period:

	For the nine months ended
	September 30, 2015
					Weighted
				Weighted	Average
				Average	Contractual
Options	Shares			Exercise Price	Life (Years)
Outstanding - Beginning of period	327,003		$	12.18
Forfeited or expired	(22,655	)		11.02
Outstanding - End of period	304,348		$	12.26	6.11
Vested and Expected to Vest at September 30, 2015	295,218
Exercisable at September 30, 2015	260,555

The fair value of the stock-based awards was estimated using the Black-Scholes model. No options were granted during the nine months ended September 30, 2015.

As of September 30, 2015, the amount of unrecognized compensation expense related to stock options awards was de minimis.

Stock-based compensation expense resulting from stock options granted to employees was de minimis for the nine months ended September 30, 2015 and 2014 and was recorded within selling, general, and administrative expenses.

Shareholder Rights Plan

On September 2, 2014, in connection with an unsolicited, non-binding acquisition proposal, the Company's Board of Directors (the "Alteva Board") adopted a Stockholder Rights Plan that provides for the distribution of one right for each share of common stock outstanding. Each right entitles the holder to purchase one one-thousandth (1/1000^th) of a share of Series A Junior Participating Preferred Stock, par value of $0.01 per share, of the Company (the "Preferred Stock") at a price of $22.20 per one-thousandth of a share of Preferred Stock, subject to adjustment. The rights generally become distributed and exercisable at the discretion of the Alteva Board following a public announcement that 20% or more of the Company's common stock has been acquired or an intent to acquire has become apparent. By its terms, the Stockholder Rights Plan expired on September 1, 2015.

Share Repurchase Program

On August 25, 2014, the Alteva Board authorized a repurchase program for up to $3.0 million of its common stock. Share purchases may take place in open market transactions or in privately negotiated transaction and may be made from time to time depending on market conditions, share price, trading volume and other factors. The repurchase program authorized by the Alteva Board does not require the Company to acquire a specific number of shares, and may be terminated, suspended, or modified at any time. The timing and actual number of shares repurchased, if any, will depend on a variety of factors including the market price of the Companys common stock, regulatory, legal and contractual requirements, and other market factors. The share repurchase is expected to be funded from available cash on hand.

On May 14, 2015, the stock repurchase program was terminated by the Company's Board of Directors in connection with approving the special cash dividend of $2.60 per outstanding common share (see Note 10).

As of September 30, 2015, the Company repurchased 11,057 shares under the repurchase program at a value of $0.1 million. Shares were purchased on the open market at the prevailing days stock price, plus transaction costs.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2015

Shareholders' Equity [Abstract]

Shareholders' Equity

NOTE 10: SHAREHOLDERS EQUITY

A summary of the changes to shareholders equity for the nine months ended September 30, 2015 and 2014 is provided below:

		For the nine months ended September 30,
($ in thousands)		2015			2014
Shareholders' equity, beginning of period	$	40,156		$	13,006
Net (loss) income		(3,838	)		29,958
Dividends paid on common stock		(15,601	)		-
Dividends paid on preferred stock		(19	)		(19	)
Stock based compensation		684			677
Treasury stock purchases		(125	)		(399	)
Changes in pension and postretirement benefit plans		782			410
Shareholders' equity, end of period	$	22,039		$	43,633

Special Cash Dividend

On May 14, 2015, the Companys Board of Directors authorized and declared a special cash dividend of $2.60 on each common share.

The record date for the special cash dividend was June 19, 2015, and the payment date for the dividend was June 30, 2015. At $2.60 per share, the special cash dividend represented approximately 36.0% of the Companys closing stock price on May 14, 2015. Pursuant to NYSE MKT policy, when a dividend is declared in a per share amount that exceeds 20% of a company's stock price, the date on which that company's shares will begin to trade without the dividend, or ex-dividend, is the first business day following the payable date. The ex-dividend date as set by NYSE MKT was July 1, 2015, the first business day following the payable date for the special cash dividend. Shareholders of record on the record date who sold their shares of the Companys common stock prior to July 1, 2015 were required by the NYSE MKT to give the purchaser of those shares of the Companys common stock a due bill, covering the amount of the dividend, to be redeemed on the date fixed by the NYSE MKT.

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Orange County-Poughkeepsie Limited Partnership (Summarized O-P Income Statement Information) (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2014 USD ($)
Schedule of Equity Method Investments [Line Items]
Company's share	$ 52,373
Orange County-Poughkeepsie Limited Parnership [Member]
Schedule of Equity Method Investments [Line Items]
Net sales	170,746
Cellular service cost	80,051
Operating expenses	44,726
Operating income	45,969
Other income	62
Net income	46,031
Company's share	$ 2,597

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

NOTE 15: SUBSEQUENT EVENTS

On October 8, 2015, Missy Hogan and Jennifer Geiger, as Trustees for the Janice Lynn Livingston Special Needs Trust U/A 2/17/11 (the "Plaintiff"), filed a suit in New York state court against Alteva, Alteva's Board of Directors (Kelly C. Bloss, Brian J. Kelley, Jeffrey D. Alario, Douglas B. Benedict, and Edward J. Morea, together with Alteva, Inc. "Alteva Defendants"), MBS Holdings, Inc. and Arrow Merger Subsidiary, Inc. Plaintiff has requested that the court certify the suit as a class action, but the court has not ruled on the request. In the lawsuit, Plaintiff alleges that Alteva Defendants have breached their fiduciary duties to the public shareholders of Alteva by, among other things, failing to take reasonable steps to obtain and/or ensure that the public shareholders receive adequate and fair value for their shares in the proposed transaction. Plaintiff also alleges that MBS Holdings, Inc. and Arrow Merger Subsidiary, Inc. aided and abetted Alteva Defendants in breaching their fiduciary duties to the public shareholders of Alteva.

In addition, in a filing dated October 13, 2015, Plaintiff requested that the court issue an order restraining the November 16, 2015 vote. On October 19, 2015, the court denied Plaintiff's request for injunctive relief, but ordered expedited discovery and a hearing on November 12, 2015 concerning whether a preliminary injunction should be issued enjoining the November 16, 2015 vote.

At the November 12, 2015 hearing, the court denied Plaintiff's request for a preliminary injunction. The underlying case remains pending in New York state court.

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Pension Plans And Postretirement Obligations (Tables)

9 Months Ended

Sep. 30, 2015

Pension Plans And Postretirement Obligations [Abstract]

Components Of Net Periodic Cost (Gain)

		Pension Benefits						Postretirement Benefits
		For the three months ended						For the three months ended
($ in thousands)		September 30, 2015		September 30, 2014				September 30, 2015		September 30, 2014
Interest cost	$	195		$	191		$	24		$	30
Expected return on plan assets		(195	)		(228	)		7			(6	)
Amortization of prior service cost		14			14			(11	)		(49	)
Recognized actuarial loss		237			142			21			6
Net periodic benefit cost (benefit)	$	251		$	119		$	41		$	(19	)

	Pension Benefits						Postretirement Benefits
	For the nine months ended						For the nine months ended
($ in thousands)		September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Interest cost	$	586		$	604		$	73		$	89
Expected return on plan assets		(586	)		(669	)		21			(15	)
Amortization of prior service cost		42			42			(34	)		(147	)
Recognized actuarial loss		711			497			63			18
Net periodic benefit cost (benefit)	$	753		$	474		$	123		$	(55	)

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Office Relocation (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Segment Reporting Information [Line Items]
Proceeds from lease termination agreement	$ 1,500
Income from lease termination		$ 25	$ (4)	$ 1,515	$ 23
Accelerated depreciation		0		$ 800
Term of lease				10 years
Minimum rental payments due in next twelve months		$ 400		$ 400
Percentage increase in lease payment		2.50%		2.50%
Unified Communications [Member]
Segment Reporting Information [Line Items]
Accelerated deferred rent		$ 0		$ 400

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Stock Based Compensation (Schedule Of Restricted Stock Activity) (Details) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance - Beginning of period, Shares	124,578
Granted, Shares	80,452
Vested, Shares	(91,262)
Forfeited, Shares	(3,365)
Balance - End of period, Shares	110,403
Balance - Beginning of period, Grant Date Weighted Average Price per Share | $ / shares	$ 9.84
Granted, Grant Date Weighted Average per Share | $ / shares	7.37
Vested, Grant Date Weighted Average per Share | $ / shares	9.27
Forfeited, Grant Date Weighted Average per Share | $ / shares	9.94
Balance - End of period, Grant Date Weighted Average Price per Share | $ / shares	$ 8.52

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance for uncollectibles	$ 421	$ 402
Common stock, par value	$ 0.01	$ 0.01
Common stock, authorized shares	10,000,000	10,000,000
Common stock, issued shares	6,903,000	6,826,000
Treasury stock, common shares	902,000	885,000
Preferred Stock $100 Par Value [Member]
Preferred shares, par value	$ 100	$ 100
Preferred shares, authorized shares	5,000	5,000
Preferred shares, issued shares	5,000	5,000
Preferred Stock $0.01 Par Value [Member]
Preferred shares, par value	$ 0.01	$ 0.01
Preferred shares, authorized shares	10,000,000	10,000,000
Preferred shares, unissued shares	10,000,000	10,000,000

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Orange County-Poughkeepsie Limited Partnership

9 Months Ended

Sep. 30, 2015

Orange County-Poughkeepsie Limited Partnership [Abstract]

Orange County-Poughkeepsie Limited Partnership

NOTE 4: ORANGE COUNTY-POUGHKEEPSIE LIMITED PARTNERSHIP

The Company was a limited partner in the Orange County-Poughkeepsie Limited Partnership (O-P) and had an 8.108% limited partnership interest in the O-P until April 30, 2014, which was accounted for under the equity method of accounting. The majority owner and general partner of the O-P is Verizon Wireless of the East LP (Verizon).

On April 30, 2014, the Company exercised the Put option and sold all of its ownership interest in the O-P for gross proceeds of $50 million, which resulted in a gain on the sale of $49.8 million. The Company did not receive any income from the O-P after April 30, 2014. The Company used a portion of the proceeds to repay all of the then outstanding borrowings under the TriState credit facility, paid taxes on the gain and fund a special dividend paid in this quarter. The Company expects to use the remaining gross proceeds, among other things, for working capital needs and support growth initiatives. The Company may, in its discretion, use the gross proceeds for other purposes.

Pursuant to the equity method accounting of the Companys investment income, the Company is required to record the income from the O-P as an increase to the Companys investment account. On May 26, 2011, the Company entered into an agreement (the "4G Agreement") with Verizon and Cellco Partnership (d/b/a Verizon Wireless), the other limited partner, in the O-P to make certain changes to the O-P partnership agreement. The 4G Agreement provided for guaranteed annual cash distributions to the Company through 2013. The Company was therefore required to apply the cash payments made as a return on its investment when received. As a result of receiving the fixed guaranteed cash distributions from the O-P in excess of the Companys proportionate share of the O-P income, the investment account was reduced to zero during 2012. Thereafter, the Company recorded the fixed guaranteed cash distributions that were received from the O-P in excess of the proportionate share of the O-P income directly to the Companys statement of operations as other income. In 2014 when the guaranteed distribution ceased, the Company returned to recording the income from the O-P as in increase to the Companys investment account and any cash payments received were applied as a return on its investment. As of September 30, 2015 and December 31, 2014, the investment account was zero.

The following summarizes the income statement (unaudited) for the nine months ended September 30, 2014:

	For the nine months
	ended
($ in thousands)	September 30, 2014
Net sales	$	170,746
Cellular service cost		80,051
Operating expenses		44,726
Operating income		45,969
Other income		62
Net income	$	46,031
Company's share	$	2,597

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Stock Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

Stock Based Compensation [Abstract]

Schedule Of Restricted Stock Activity

	For the nine months ended
	September 30, 2015
				Weighted
				Average Fair
	Shares			Value
Balance - nonvested at December 31, 2014	124,578		$	9.84
Granted	80,452			7.37
Vested	(91,262	)		9.27
Forfeited	(3,365	)		9.94
Balance - nonvested at September 30, 2015	110,403		$	8.52

Schedule Of Stock Option Activity

	For the nine months ended
	September 30, 2015
					Weighted
				Weighted	Average
				Average	Contractual
Options	Shares			Exercise Price	Life (Years)
Outstanding - Beginning of period	327,003		$	12.18
Forfeited or expired	(22,655	)		11.02
Outstanding - End of period	304,348		$	12.26	6.11
Vested and Expected to Vest at September 30, 2015	295,218
Exercisable at September 30, 2015	260,555

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Pension Plans And Postretirement Obligations (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Pension Plans And Postretirement Obligations [Abstract]
Company contributions	$ 0.1	$ 0.2

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Merger Agreement

9 Months Ended

Sep. 30, 2015

Merger Agreement [Abstract]

Merger Agreement

NOTE 14: MERGER AGREEMENT

On September 2, 2015, the Company, entered into an Agreement and Plan of Merger (the Merger Agreement) with MBS Holdings, Inc., a Delaware corporation (Parent), and Arrow Merger Subsidiary, Inc., a New York corporation and a wholly-owned subsidiary of Parent (Merger Sub), pursuant to which Merger Sub will merge with and into the Company (the Merger), with the Company surviving the Merger as a wholly-owned subsidiary of Parent.

At the time that the Merger becomes effective (the Effective Time), (i) each issued and outstanding common share of the Company, par value $0.01 per share (the Common Stock), other than certain excluded shares, will be converted automatically into the right to receive $4.70 in cash (the Common Stock Merger Consideration), and (ii) each issued and outstanding 5% Series Preferred Share of the Company, par value $100 per share, will be converted automatically into the right to receive $100 all in cash, plus any accrued but unpaid dividends through the Closing Date (as defined in the Merger Agreement).

Completion of the Merger is subject to various closing conditions, including, among others, (a) the affirmative vote of at least seventy percent (70%) of the outstanding shares of Common Stock entitled to vote at a special shareholders meeting ("Shareholders' Meeting") in favor of adopting the Merger Agreement and approving the Merger, (b) the receipt of required regulatory approvals and consents, and (c) the absence of any law, injunction, judgment, order, decree or ruling restraining or prohibiting consummation of the Merger. Each party's obligation to consummate the Merger is also subject to certain additional conditions, which include the accuracy of the other party's representations and warranties and the other party's compliance with its covenants and obligations in all material respects (in each case, as contained in the Merger Agreement).

Shareholders of the Company have been asked to vote on the adoption of the Merger Agreement and the approval of the Merger at the Shareholders' Meeting that is currently scheduled for November 16, 2015.

For the nine months ended, the Company incurred $0.9 million of costs associated with the pending Merger. These costs are presented in selling, general and administrative expenses in the statements of operations.

If the proposal to adopt the Merger Agreement is not approved by the Shareholders, or if the Merger is not consummated for any other reason, under specified circumstances, Alteva will be required to pay Parent (a) a termination fee of $873,000, or (b) the lesser of $750,000 and Parents documented out-of-pocket transaction fees and expenses actually incurred in connection with the transactions contemplated in the Merger Agreement.