12.

Segments

The Company’s reportable segments are Telephony Products and Puerto Rico, each of which offers different products and services or services in different geographic areas. The Telephony Products segment provides telephone products, service and support to businesses and organizations. The Puerto Rico segment provides the sales and service of integrated communications systems, data equipment, security products and telephony billing services to Puerto Rico and the Virgin Islands. Performance of each segment is assessed independently. During fiscal 2013, the Company disposed of its Communications Systems and Services segment and has reclassified its condensed consolidated statements of operations for the six months ended January 31, 2014 and 2013 to reflect operations of this segment as discontinued. Income from discontinued operations for the six months ended January 31, 2013 totaled $127,000, which excludes approximately $431,000 of ongoing operating costs and expenses, which were allocated to the Communications Systems and Services six months ended January 31, 2013 segment information disclosed below. For the six months ended January 31, 2014, such ongoing operating costs and expenses are included in the Telephony Products operating segment.

Segment reporting for activity as of and for the three and six months ended January 31, 2014 follows (in thousands):

	Telephony Products				Puerto Rico				Total
	3 Months		6 Months		3 Months		6 Months		3 Months		6 Months

Revenue	$	2,120	$	5,094	$	2,513	$	4,820	$	4,633	$	9,914
Net loss from operations		(378)		(394)		(199)		(168)		(577)		(562)
Total assets		-		10,379		-		4,277		-		14,656
Capital expenditures		2		51		11		22		13		73
Allowance for doubtful accounts		-		16		-		162		-		178
Depreciation and amortization		17		34		23		47		40		81

Segment reporting for activity as of and for the three and six months ended January 31, 2013 follows (in thousands):

	Communications
	Systems and Services				Telephony Products				Puerto Rico				Total
	3 Months		6 Months		3 Months		6 Months		3 Months		6 Months		3 Months		6 Months

Revenue	$	312	$	660	$	2,501	$	5,482	$	2,428	$	4,833	$	5,241	$	10,975
Net (loss) income from operations		(157)		(304)		(10)		140		22		119		(145)		(45)
Total assets		-		1,812		-		7,469		-		3,810		-		13,091
Capital expenditures		-		-		12		119		-		41		12		160
Allowance for doubtful accounts		-		105		-		23		-		181		-		309
Depreciation and amortization		1		3		11		21		5		19		17		43

Substantially all of the Company’s revenues are earned in the United States and the Commonwealth of Puerto Rico. Substantially all of the Company’s assets are located in the United States and the Commonwealth of Puerto Rico.