Discontinued Operations

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

Discontinued Operations

Discontinued Operations

Our ISDN resale services no longer fit into our overall strategic plan. In September 2010, we entered into an agreement with an independent telecommunications service provider to transfer these services and the related customers, and the Company receives a 15% monthly recurring referral fee for those revenues for as long as the customers maintain service. Such amounts were diminimus for the three months ended March 31, 2012 and 2011. The transfer of the customers was completed in the third quarter of 2011, and the Company will have no continuing involvement with the ISDN product line.

The Company accordingly classified these ISDN related revenues and expenses as discontinued operations in accordance with ASC 205.20 “Discontinued Operations.” The accompanying condensed consolidated financial statements reflect the operating results and balance sheet items of the discontinued operations separately from continuing operations. Prior year financial statements have been restated in conformity with generally accepted accounting principles to present the operations of the ISDN resale services as a discontinued operation.

Revenues from the ISDN resale services, reported as discontinued operations, for the three months ended March 31, 2011 were $51,000. Net loss from the ISDN resale services, reported as discontinued operations, for the three months ended March 31, 2011 was $6,000. The assets and liabilities from the ISDN resale services, reported as net current liabilities of discontinued operations, as of March 31, 2011 were $26,000. No income tax provision was required to be recognized by the Company against income from the ISDN resale services over the related periods.