Subsequent Event

Subsequent to September 30, 2012, the Company's stockholders approved the sale of two of the Company's European subsidiaries, Alcadon-MRV AB and Interdata. A description of the sales and pro forma financial statements illustrating the impact of the sale are provided below. For reporting purposes, the results of operations of Alcadon and Interdata will be included as income from discontinued operations in the Company's fourth quarter 2012 results.

On October 12, 2012, the Company completed the sale of all of the shares of its wholly-owned subsidiary Alcadon pursuant to a Stock Purchase Agreement, dated as of September 11, 2012 (the "Alcadon Purchase Agreement") with Deltaco Aktiebolag, a public corporation organized under the laws of Sweden (“Deltaco”). The Alcadon Purchase Agreement and sale of Alcadon were approved by the Company's stockholders at the Company's annual meeting of stockholders held on October 11, 2012.

The purchase price paid at closing to the Company by Deltaco was $6.5 million plus estimated net cash as of September 30, 2012 of $1.2 million for an aggregate of $7.7 million. The cash proceeds received were subject to an escrow amount of $0.8 million and approximately $0.3 million in closing costs. The escrow fund is scheduled to be released on December 28, 2012, subject to any 'true-up' adjustments or indemnity claims. Prior to the closing, Alcadon paid a cash dividend to MRV in the amount of $3.7 million.

The assets and liabilities of Alcadon are reflected as assets and liabilities from continuing operations in the Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, respectively, and consisted of (in thousands):



	September 30, 2012		December 31, 2011
Cash and cash equivalents	$	5,300	$	6,392
Time deposits	77		101
Accounts receivable, net	3,938		3,912
Inventories	4,792		5,169
Other current assets	383		409
Total current assets	14,490		15,983
Property and equipment, net	845		660
Goodwill	—		3,737
Total assets	$	15,335	$	20,380
Accounts payable	$	1,828	$	1,988
Accrued liabilities	1,182		2,101
Other current liabilities	120		1,854
Non-current liabilities	865		599
Total liabilities	$	3,995	$	6,542

On October 16, 2012, the Company completed the sale of its wholly owned subsidiary Pedrena Enterprises B.V., a Dutch company ("Pedrena"). Pedrena is the parent company of Interdata, which is in turn, the parent company of J3TEL. The sale was completed pursuant to a Share Purchase Agreement, dated as of August 1, 2012 (the "Interdata Purchase Agreement") with IJ Next, a French "société par actions simplifiée," as Purchaser, a subsidiary of the French company of Holding Baelen Gaillard ("HBG").

The purchase price was 14.6 million euros ($19.0 million) and was paid in cash at closing by HBG to the Company. Cash proceeds to the Company are subject to closing costs of approximately $0.8 million. In addition to the Interdata Purchase Agreement, the Company and Purchaser entered into a Representations and Warranties Agreement on August 1, 2012 (the "Representation and Warranties Agreement") related to the transaction. In addition to customary representations, warranties, covenants and indemnification obligations, the Representations and Warranties Agreement contains a provision that if the Company does not obtain a representations and warranties insurance policy within 90 days of close of the transaction, and if the Company's cash falls below $20.0 million prior to December 31, 2013, the Company will deposit 1.5 million euros (or U.S. equivalent) in an escrow account to secure its indemnification obligations under the Representations and Warranties Agreement.

The assets and liabilities of Interdata are reflected as assets and liabilities from continuing operations in the Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011, respectively, and consisted of (in thousands):



	September 30, 2012		December 31, 2011
Cash and cash equivalents		$6,779		$6,370
Accounts receivable, net	9,998		13,173
Inventories	2,491		1,554
Other current assets	1,632		1,115
Total current assets	20,900		22,212
Property and equipment, net	2,275		2,369
Goodwill	2,043		2,057
Other assets	258		260
Total assets		$25,476		$26,898
Accounts payable		$4,084		$4,191
Accrued liabilities	3,380		3,942
Other current liabilities	2,741		3,382
Non-current liabilities	378		380
Total liabilities		$10,583		$11,895

The use of proceeds from the sales of Alcadon and Interdata will be for general corporate purposes. Our Board of directors continuously evaluates the best use of the Company's assets for increasing shareholder value.

On October 11, 2012 the Company's stockholders approved a motion authorizing the Board of Directors to amend the Company's amended and restated certificate of incorporation to effect a reverse stock split of all outstanding shares of the Company's Common Stock at one of the approved ratios of 1:10, 1:11, 1:12, 1:13, 1:14, 1:15, 1:16, 1:17, 1:18, 1:19 or 1:20, at the Board of Director's discretion, and reduce the authorized shares of Common Stock in the same ratio. As of the date of the filing of this Form 10-Q, the Company's Board had not authorized an amendment to effect a reverse stock split or determined a ratio to be used.