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&lt;p style="margin-top: 12px; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;1.&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;DESCRIPTION OF THE BUSINESS &lt;/b&gt;&lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 6px; text-indent: 4%; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;&lt;i&gt;Organization&lt;/i&gt;&lt;/b&gt;&amp;#8212;Neutral Tandem, Inc. (the Company) provides U.S. and international voice, IP Transit, and Ethernet telecommunications services primarily on a wholesale basis. The Company offers these services using an all-IP network, which enables the Company to deliver global connectivity for a variety of media, including voice, data and video. The Company's solutions enable carriers and other providers to deliver telecommunications traffic or other services where they do not have their own network or elect not to use their own network. These solutions are sometimes called "off-net" services. The Company also provides our solutions to customers, like content providers, who also typically do not have their own network. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 4%; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;&lt;i&gt;Secondary Offering&lt;/i&gt;&lt;/b&gt;&amp;#8212;In April 2008, certain shareholders of the Company completed a secondary offering in which 4.9&amp;nbsp;million shares of the Company's common stock were sold at a price of $18.00 per share. The Company did not sell any shares of its common stock and received no proceeds from the secondary offering. The Company paid approximately $0.6 million of certain expenses related to the offering and recorded the entire amount as other expense in the first quarter 2008. &lt;/font&gt;&lt;/p&gt;

&lt;p style="margin-top: 12px; text-indent: 4%; margin-bottom: 0px;"&gt;&lt;font style="font-family: Times New Roman;" class="_mt" size="2"&gt;&lt;b&gt;&lt;i&gt;Acquisition of Tinet S.p.A.&lt;/i&gt;&lt;/b&gt;&amp;#8212;On October&amp;nbsp;1, 2010 the Company completed its acquisition of Tinet S.p.A. (Tinet) for $103.1 million, comprised of $77.4 million, in cash, paid on October 1, 2010 for the outstanding shares of Tinet's capital stock, repayment of $31.1 million of Tinet's debt as part of the closing and $5.4 million in cash acquired. The purchase price was financed with cash from the Company's balance sheet. $7.5 million of cash consideration will be placed in escrow for a period of two years following the acquisition. In addition to the cash, the Company recorded approximately $4.0 million for acquisition-related costs, including legal, accounting and advisory services in its statement of income.&lt;/font&gt;&lt;/p&gt;&lt;/div&gt; &lt;/div&gt;</NonNumbericText><NonNumericTextHeader>1.&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;DESCRIPTION OF THE BUSINESS

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 -Publisher AICPA
 -Name Statement of Position (SOP)
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