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 nine months ended April 30, 2014 and 2013 to reflect operations of this segment as discontinued. Income from discontinued operations for the nine months ended April 30, 2013 totaled $240,000, which excludes approximately $627,000 of ongoing operating costs and expenses, which were allocated to the Communications Systems and Services nine months ended April 30, 2013 segment information disclosed below. For the nine months ended April 30, 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 nine months ended April 30, 2014 follows (in thousands):

	Telephony Products				Puerto Rico				Total
	3 Months		9 Months		3 Months		9 Months		3 Months		9 Months

Revenue	$	2,292	$	7,386	$	2,213	$	7,033	$	4,505	$	14,419
Net (loss) income from operations		(184)		(578)		1		(167)		(183)		(745)
Total assets		-		9,971		-		3,935		-		13,906
Capital expenditures		-		51		5		27		5		78
Allowance for doubtful accounts		-		17		-		141		-		158
Depreciation and amortization		15		49		27		74		42		123

Segment reporting for activity as of and for the three and nine months ended April 30, 2013 follows (in thousands):

	Communications
	Systems and Services				Telephony Products				Puerto Rico				Total
	3 Months		9 Months		3 Months		9 Months		3 Months		9 Months		3 Months		9 Months

Revenue	$	323	$	983	$	2,871	$	8,353	$	1,908	$	6,741	$	5,102	$	16,077
Net (loss) income from operations		(83)		(387)		111		251		63		182		91		46
Total assets		-		1,661		-		7,262		-		3,355		-		12,278
Capital expenditures		-		-		3		122		56		97		59		219
Allowance for doubtful accounts		-		106		-		17		-		161		-		284
Depreciation and amortization		1		4		13		34		14		33		28		71

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.