ACQUISITION

6 Months Ended

Jun. 30, 2012

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

NOTE 3 — ACQUISITION

On April 30, 2012, the Company entered into an agreement (the “Acquisition Agreement”) to acquire privately-owned Chicago-based, nLayer Communications, Inc. (“nLayer”) through the acquisition of all of the equity interests in nLayer. nLayer owns and operates its own continuously upgraded all-optical IP/MPLS network and provides wholesale IP transit, data transport, and managed networking services in major markets throughout North America and Europe.

The closing of the acquisition occurred simultaneously with the signing of the Acquisition Agreement. In consideration for the equity interests in nLayer, the Company agreed to pay the sellers $18.0 million, subject to a working capital adjustment and a reduction if nLayer’s revenue is lower than specified target levels during the two-year period after the closing of the acquisition.

At the closing, the Company paid $12.0 million, with the remaining $6.0 million, subject to adjustment, to be paid over the two-year period after the closing. The sellers may elect to receive up to one-half of the post-closing payments to which they become entitled in the form of common stock of the Company, valued for this purpose at $2.45 per share. As a result of this option, the Company valued the deferred consideration at $6.2 million.

The Company and the former stockholders of nLayer finalized an agreement to allow the Company to treat the acquisition as an asset purchase. This agreement will result in additional purchase price and goodwill. As a result of the agreement, book and tax bases will be the same.

The Company accounted for the acquisition using the acquisition method of accounting with GTT treated as the acquiring entity. Accordingly, consideration paid by the Company to complete the acquisition of nLayer has been preliminarily allocated to nLayer’s assets and liabilities based upon their estimated fair values as of the date of completion of the acquisition, April 30, 2012. The Company estimated the fair value of nLayer’s assets and liabilities based on discussions with nLayer’s management, due diligence and information presented in financial statements.

	Amounts in thousands
Purchase Price:
Cash consideration paid at closing	$	12,000
Fair value of liabilities assumed		1,143
Fair value of deferred consideration		6,200
Total consideration	$	19,343
Purchase Price Allocation:
Acquired Assets
Current assets	$	1,148
Property and equipment		2,657
Intangible assets		8,400
Total fair value of assets acquired		12,205
Goodwill		7,138
Total consideration	$	19,343

The following schedule presents unaudited consolidated pro forma results of operations as if the acquisition had occurred on January 1, 2011. This information does not purport to be indicative of the actual results that would have occurred if the acquisition had actually been completed January 1, 2011, nor is it necessarily indicative of the future operating results or the financial position of the combined company. The unaudited pro forma results of operations do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities.

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Amounts in thousands, except per share data
Revenue	$	28,543		$	24,923		$	57,405	$	48,712
Net income (loss)	$	(305	)	$	(78	)	$	38	$	392
Net income (loss) per share:
Basic	$	(0.02	)	$	-		$	-	$	0.02
Diluted	$	(0.02	)	$	-		$	-	$	0.02
Basic		18,949,666			18,687,822			18,853,013		18,464,801
Diluted		18,949,666			18,687,822			19,703,236		18,679,290