12. Segments

9 Months Ended

Sep. 30, 2016

Segments

12. Segments

Management has chosen to organize the Company around differences based on its products and services. Hosted Telecommunications Services segment generates revenue from selling hosted telecommunication services and broadband internet services. Web Services segment generates revenue from website hosting and search engine optimization/management. The Company has two operating segments, which consist of Hosted Telecommunications Services and Web Services. Segment revenue and income (loss) before income tax provision was as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenue:
Hosted telecommunications services	$	2,013		$	1,542		$	5,711		$	4,287
Web services		320			430			1,063			1,427
Consolidated revenue		2,333			1,972			6,774			5,714
Income/(loss) from operations:
Hosted telecommunications services		(716	)		(1,119	)		(2,551	)		(3,560	)
Web services		107			67			297			48
Total operating loss		(609	)		(1,052	)		(2,254	)		(3,512	)
Other income/(expense), net:
Hosted telecommunications services		(11	)		19			(21	)		58
Web services		3			-			19			209
Total other income/(expense), net		(8	)		19			(2	)		267
Income/(loss) before income tax provision
Hosted telecommunications services		(727	)		(1,100	)		(2,572	)		(3,502	)
Web services		110			67			316			257
Loss before income tax provision	$	(617	)	$	(1,033	)	$	(2,256	)	$	(3,245	)

Depreciation and amortization was $31,000 and $45,000 for the Hosted Telecommunications Services segment for the three months ended September 30, 2016 and 2015, respectively. Depreciation and amortization was $94,000 and $166,000 for the Hosted Telecommunications Services segment for the nine months ended September 30, 2016 and 2015, respectively. Depreciation and amortization was $5,000 and $11,000 for the Web Services segment for the three months ended September 30, 2016 and 2015, respectively. Depreciation and amortization was $16,000 and $50,000 for the Web Services segment for the nine months ended September 30, 2016 and 2015, respectively.

Interest income was $4,000 and $6,000 for the Web Services segment for the three months ended September 30, 2016 and 2015, respectively. Interest income was $12,000 and $19,000 for the Web Services segment for the nine months ended September 30, 2016 and 2015, respectively.

Interest expense was $34,000 and $3,000 for the Hosted Telecommunications Services segment for the three months ended September 30, 2016 and 2015, respectively. Interest expense was $90,000 and $7,000 for the Hosted Telecommunications Services segment for the nine months ended September 30, 2016 and 2015, respectively. Interest expense was $5,000 and $0 for the Web Services segment for the three months ended September 30, 2016 and 2015, respectively. Interest expense was $15,000 and $9,000 for the Web Services segment for the nine months ended September 30, 2016 and 2015, respectively.