Discontinued Operations

12 Months Ended

Dec. 31, 2011

Discontinued Operations [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

On July 29, 2011, the then Board of Directors of Verge (pre-Merger) approved a spin-off of the operations of Verge's Digital Services business to a related entity, Triton Digital, Inc. (“Triton Digital”) that was owned by Triton, Verge's sole stockholder at that time. As part of the spin-off, Verge Media, Inc. (our wholly-owned subsidiary) indemnified Triton for damages resulting from claims (subject to limited carve-outs) arising from or directly related to our Radio network business, Verge Media, Inc. or any of our respective subsidiaries (other than digital companies), provided such claims are made on or before April 30, 2013. Verge spun-off the Digital Services business' net assets with a carrying value of $111,859 to Triton Digital for the year ended December 31, 2011.

The results of the Digital Services business included in discontinued operations for all periods presented were as follows:

	Years Ended December 31,
	2011			2010
Revenue	$	23,543		$	32,796
Cost of revenue	9,065			12,395
Gross profit	14,478			20,401
Operating costs	11,899			19,235
Depreciation and amortization	3,867			5,587
Loss from operations	(1,288		)	(4,421		)
Gain from re-measurement of investment	—			5,573
Loss on equity investment	—			(778		)
Other expenses	—			(696		)
Interest income	26			10
Loss from discontinued operations, before provision for income taxes	(1,262		)	(312		)
Income tax provision for discontinued operations	364			3,054
Net loss from discontinued operations	$	(1,626	)	$	(3,366	)

The Digital Services business' results of operations have been removed from our results of continuing operations for all periods presented. Verge was not required to amend or pay down its existing debt in connection with the spin-off of the Digital Services business and therefore we have not allocated interest expense to the discontinued operations accordingly. We have not allocated any corporate overhead to the discontinued operations. We have not had any significant continuing involvement in the Digital Services business since the spin-off. We have continuing activities and cash flows related to the Digital Services business through the Digital Reseller Agreement (see Note 5 — Related Party Transactions) which was entered into on July 29, 2011 and has a four-year term. Under this agreement Verge agreed to provide, at its sole expense and on an exclusive basis (subject to certain exceptions), for four years, services to Triton Digital customarily rendered by network radio sales representatives in the United States in exchange for a commission.

Assets and liabilities of discontinued operations as of December 31, 2010 were comprised of the following:

ASSETS
Current assets:
Cash and cash equivalents	$	11,673
Accounts receivable, net of allowance for doubtful accounts	9,541
Receivable from related party	4,830
Prepaid expense and other assets	873
Total current assets of discontinued operations	26,917
Property and equipment, net	2,034
Intangible assets, net	31,006
Goodwill	70,043
Other assets	1,641
Total non-current assets of discontinued operations	104,724
Total assets of discontinued operations	$	131,641
LIABILITIES
Current liabilities:
Accounts payable	$	973
Producer payable	1,010
Accrued and other current liabilities	7,405
Total current liabilities of discontinued operations	9,388
Deferred tax liability	3,808
Other liabilities	159
Total non-current liabilities of discontinued operations	3,967
Total liabilities of discontinued operations	$	13,355