Basis of Presentation (Tables)

6 Months Ended

12 Months Ended

Jan. 31, 2014

Jul. 31, 2013

Summary of company's revenues from its six product lines

The Company’s revenues from its three product lines are the result of separate, individual deliverables:

	Type of Revenues Earned
		Professional	Maintenance
Product Line	Equipment/Software	Services	Contracts
Cortelco Products and Services	Individual sale	Individual sale	-
CSPR Products and Services	Individual sale	Individual sale	Individual sale
CSPR Telephony Billing	-	Individual sale	-

The Company’s revenues from its three product lines are the result of separate, individual deliverables:

	Type of Revenues Earned
		Professional	Maintenance
Product Line	Equipment/Software	Services	Contracts

Cortelco Products	Individual sale	-	-

CSPR Products	Individual sale	Individual sale	Individual sale

CSPR Telephony Billing	-	Individual sale	-

Liabilities recorded at fair value

The following table presents information about the liabilities recorded at fair value at July 31, 2013, in the balance sheets (in thousands):

	Fair Value Measurements at July 31, 2013
	Quoted Prices		Significant
	In Active		Other		Significant
	Markets for		Observable		Unobservable		Total at
	Identical Assets		Inputs		Inputs		July 31,
	(Level 1)		(Level 2)		(Level 3)		2013
Notes payable-related parties	$	-	$	-	$	3,189	$	3,189

Total	$	-	$	-	$	3,189	$	3,189

The following table presents information about the liabilities recorded at fair value at July 31, 2012, in the balance sheets (in thousands):

	Fair Value Measurements at July 31, 2012
	Quoted Prices		Significant
	In Active		Other		Significant
	Markets for		Observable		Unobservable		Total at
	Identical Assets		Inputs		Inputs		July 31,
	(Level 1)		(Level 2)		(Level 3)		2012
Notes payable-related parties	$	-	$	-	$	3,668	$	3,668

Total	$	-	$	-	$	3,668	$	3,668

Note Payable

The following represents transactions related to the note payable for the six months ended January 31, 2014 (in thousands):

Beginning fair value - August 1, 2013	$	3,004
Imputed interest		230
Change in estimates		114
Interest expense		344
Payments		(103)
Ending fair value - January 31, 2014	$	3,245

The following represents transactions related to the note payable for the years ended July 31, 2013 and 2012 (in thousands).

	2013		2012
Beginning fair value	$	3,486	$	3,504
Imputed interest		487		518
Change in estimates		(796)		(368)
Interest (income) expense		(309)		150
Payments		(173)		(168)
Ending fair value - July 31	$	3,004	$	3,486

Cortelco Systems Holding Corp [Member]

Summary of company's revenues from its six product lines

The Company’s revenues from its three product lines are the result of separate, individual deliverables:

	Type of Revenues Earned
		Professional	Maintenance
Product Line	Equipment/Software	Services	Contracts
Cortelco Products and Services	Individual sale	Individual sale	-
CSPR Products and Services	Individual sale	Individual sale	Individual sale
CSPR Telephony Billing	-	Individual sale	-

The Company’s revenues from its three product lines are the result of separate, individual deliverables:

		Type of Revenues Earned
			Professional	Maintenance
Product Line	Equipment/Software		Services	Contracts

Cortelco Products	Individual sale		-	-

CSPR Products	Individual sale		Individual sale	Individual sale

CSPR Telephony Billing	-		Individual sale	-

Liabilities recorded at fair value

The following table presents information about the liabilities recorded at fair value at July 31, 2013, in the balance sheets (in thousands):

	Fair Value Measurements at July 31, 2013
		Quoted Prices		Significant
		In Active		Other		Significant
		Markets for		Observable		Unobservable		Total at
		Identical Assets		Inputs		Inputs		July 31,
		(Level 1)		(Level 2)		(Level 3)		2013

Notes payable-related parties	$	-	$	-	$	3,189	$	3,189

Total	$	-	$	-	$	3,189	$	3,189

The following table presents information about the liabilities recorded at fair value at July 31, 2012, in the balance sheets (in thousands):

	Fair Value Measurements at July 31, 2012
		Quoted Prices		Significant
		In Active		Other		Significant
		Markets for		Observable		Unobservable		Total at
		Identical Assets		Inputs		Inputs		July 31,
		(Level 1)		(Level 2)		(Level 3)		2012

Notes payable-related parties	$	-	$	-	$	3,668	$	3,668
Total	$	-	$	-	$	3,668	$	3,668

Note Payable

The following represents transactions related to the note payable for the six months ended January 31, 2014 (in thousands):

Beginning fair value - August 1, 2013	$	3,004
Imputed interest		230
Change in estimates		114
Interest expense		344
Payments		(103)
Ending fair value - January 31, 2014	$	3,245

The note is classified within Level 3 of the fair value hierarchy. The following represents transactions related to the note payable for the years ended July 31, 2013 and 2012 (in thousands).

		2013		2012

Beginning fair value	$	3,486	$	3,504
Imputed interest		487		518
Change in estimates		(796)		(368)
Interest expense		(309)		150
Payments		(173)		(168)
Ending fair value - July 31	$	3,004	$	3,486

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring and/or nonrecurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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