4 - Property and Equipment

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment Disclosure [Text Block]

4 — Property and Equipment

The following is a summary of the Company’s property and equipment (in thousands):

	September 30, 2012			December 31, 2011
	(unaudited)
Telecommunications equipment	$	3,373			$	3,340
Computer equipment		203				203
Telecommunications software		107				107
Leasehold improvements, office equipment and furniture		86				86
Total property and equipment		3,769				3,736
Less: accumulated depreciation and amortization		(3,645	)			(3,618	)
	$	124			$	118

Depreciation expense included in network costs was $7,000 and $9,000 for the three months ended September 30, 2012 and 2011, respectively, and $20,000 and $27,000 for the nine months ended September 30, 2012 and 2011, respectively. Depreciation and amortization expense included in general and administrative expenses was $2,000 and $3,000 for the three months ended September 30, 2012 and 2011, respectively and $7,000 and $10,000 for the nine months ended September 30, 2012 and 2011, respectively.

In May 2006, the Company entered into a strategic agreement with Cantata Technology, Inc. (“Cantata”), a VoIP equipment and support services provider. Under the terms of this agreement, the Company obtained VoIP equipment to expand its operations. In January 2010, the Company settled a lawsuit brought by Cantata regarding the agreement for $500,000. The settlement contains a long-term payment plan and is subject to timely payments by the Company. As of September 30, 2012, the remaining amount due under the settlement agreement was $175,000.