Fusion Connect (FSNN) 10-Q 14 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 12, 2013
Document And Entity Information	'	'
Entity Registrant Name	'FUSION TELECOMMUNICATIONS INTERNATIONAL INC	'
Entity Central Index Key	'0001071411	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Is Entity a Well-known Seasoned Issuer?	'No	'
Is Entity a Voluntary Filer?	'No	'
Is Entity's Reporting Status Current?	'Yes	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	303,833,242
Document Fiscal Period Focus	'Q3	'
Document Fiscal Year Focus	'2013	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets:	'	'
Cash and cash equivalents	$1,212,514	$543,214
Accounts receivable, net of allowance for doubtful accounts of approximately $440,000 and $514,000, respectively	3,978,844	2,924,302
Inventory	435,808	341,118
Prepaid expenses and other current assets	559,056	1,001,449
Total current assets	6,186,222	4,810,083
Property and equipment, net	2,633,847	2,406,944
Other assets:	'	'
Security deposits	646,855	439,741
Restricted cash	396,036	1,026,326
Goodwill	2,603,525	2,406,269
Intangible assets, net	13,736,143	15,396,117
Other assets	476,329	582,947
Total other assets	17,858,888	19,851,400
TOTAL ASSETS	26,678,957	27,068,427
Current liabilities:	'	'
Notes payable - non-related parties	625,000	208,333
Notes payable - related parties	439,286	639,286
Equipment financing obligations	285,702	136,392
Escrow payable	122,500	'
Accounts payable and accrued expenses	7,638,426	10,579,496
Related party payable	667,793	1,159,573
Current liabilities from discontinued operations	55,000	55,000
Total current liabilities	9,833,707	12,778,080
Long-term liabilities:	'	'
Notes payable - non-related parties, net of discount	14,245,256	14,475,747
Notes payable - related parties	3,478,081	4,492,136
Equipment financing obligations	190,161	102,071
Derivative liability	1,798,875	1,066,000
Other long-term liabilities	167,685	266,132
Total liabilities	29,713,765	33,180,166
Commitments and contingencies	'	'
Stockholders' deficit:	'	'
Preferred stock, $0.01 par value, 10,000,000 shares authorized, 5,045 and 11,907 shares issued and outstanding	50	119
Common stock, $0.01 par value, 550,000,000 shares authorized, 299,267,114 and 178,250,533 shares issued and outstanding	2,992,670	1,782,504
Capital in excess of par value	150,729,450	146,760,005
Accumulated deficit	-156,756,978	-154,654,367
Total stockholders' deficit	-3,034,808	-6,111,739
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$26,678,957	$27,068,427

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Current assets:	'	'
Accounts receivable	$440,000	$514,000
Stockholders' deficit:	'	'
Preferred Stock, Par Value	$0.01	$0.01
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	5,045	11,907
Preferred Stock, Shares Outstanding	5,045	11,907
Common Stock, Par Value	$0.01	$0.01
Common Stock, Shares Authorized	550,000,000	550,000,000
Common Stock, Shares Issued	299,267,114	178,250,533
Common Stock, Shares Outstanding	299,267,114	178,250,533

Condensed_Consolidated_Interim

Condensed Consolidated Interim Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]	'	'	'	'
Revenue	$14,811,828	$9,959,965	$45,210,427	$31,714,105
Cost of revenues, exclusive of depreciation and amortization, shown separately below	9,953,734	9,164,247	31,310,864	28,172,796
Gross profit	4,858,094	795,718	13,899,563	3,541,309
Depreciation and amortization	911,613	94,426	2,634,112	286,603
Selling general and administrative expenses (including stock-based compensation of approximately $51,000 and $32,000 for the three months ended September 30, 2013 and 2012, and approximately $107,000 and $101,000 for the nine months ended September 30, 2013 and 2012	4,312,508	2,215,751	13,013,954	6,525,277
Total operating expenses	5,224,121	2,310,177	15,648,066	6,811,880
Operating loss	-366,027	-1,514,459	-1,748,503	-3,270,571
Other (expenses) income:	'	'	'	'
Interest expense	-663,689	-56,861	-1,992,939	-160,477
Loss on extinguishment of debt	-291,995	'	-442,574	'
Other income (expenses), net	-845,171	-63,576	-802,255	-224,419
Total other income (expenses)	-1,800,855	-120,437	-3,237,768	-384,896
(Loss) gain on extinguishment of accounts payable	-25,222	'	2,883,660	'
Net income (loss)	-2,192,104	-1,634,896	-2,102,611	-3,655,467
Preferred stock dividends in arrears	-101,451	-101,451	-301,046	-302,149
Net loss applicable to common stockholders:	($2,293,555)	($1,736,347)	($2,403,657)	($3,957,616)
Basic and diluted loss per common share:	($0.01)	($0.01)	($0.01)	($0.02)
Weighted average common shares outstanding:	'	'	'	'
Basic and diluted	220,582,275	166,432,351	198,625,110	164,107,320

Condensed_Consolidated_Interim1

Condensed Consolidated Interim Statements of Operations (Unaudited) (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]	'	'	'	'
Share Based Compensation	$51,000	$32,000	$107,000	$101,000

Condensed_Consolidated_Interim2

Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:	'	'
Net loss	($2,102,611)	($3,655,467)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	2,634,112	286,603
Loss on disposal of property and equipment	2,374	'
Loss on sale of accounts receivable	175,862	235,044
Bad debt expense	15,909	79,418
Stock-based compensation	107,211	100,685
Stock and warrants issued for services rendered or in settlement of liabilities	205,078	'
Amortization of debt discount and deferred financing fees	318,985	'
Change in fair value of derivative liability	732,875	'
Loss on extinguishment of debt	442,574	'
Gain on extinguishment of accounts payable	-2,883,660	'
Increase (decrease) in cash attributable to changes in operating assets and liabilities:	'	'
Accounts receivable	-1,032,101	354,586
Inventory	-94,690	'
Prepaid expenses and other current assets	7,704	-106,685
Other assets	25,893	17,661
Replenishment of security deposit	-144,141	'
Accounts payable and accrued expenses	-531,164	1,075,597
Other long-term liabilities	-98,447	-81,298
Net cash used in operating activities	-2,218,237	-1,693,856
Cash flows from investing activities:	'	'
Purchase of property and equipment	-843,740	-81,564
Payment of deposit for acquisition transaction	-200,000	'
Change in restricted cash	767,316	-425
Net cash used in investing activities	-276,424	-81,989
Cash flows from financing activities:	'	'
Proceeds from the sale of common stock and warrants, net	3,552,899	1,119,506
Proceeds from notes payable - related parties	100,000	486,000
Proceeds from notes payable - non-related parties	212,500	300,000
Payments on equipment financing obligations	-51,141	'
Proceeds from the sale of equity securities not yet issued	'	3,875,250
Repayments of notes payable - related parties	-385,714	-146,000
Repayments of notes payable - non-related parties	-264,583	-133,073
Net cash provided by financing activities	3,163,961	5,501,683
Net (decrease) increase in cash and cash equivalents from continuing operations	669,300	3,725,838
Cash flows from discontinued operations:	'	'
Net cash used in operating activities of discontinued operations	'	-1,490
Net change in cash and cash equivalents	669,300	3,724,348
Cash and cash equivalents, beginning of period	543,214	3,047
Cash and cash equivalents, end of period	$1,212,514	$3,727,395

1_Basis_of_Presentation_Consol

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies	'
	The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 for Fusion Telecommunications International, Inc. and its Subsidiaries (collectively, the “Company”).  These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”) and therefore omit or condense certain footnotes and other information normally included in condensed consolidated interim financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  All material intercompany balances and transactions have been eliminated in consolidation.  In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the condensed consolidated interim financial statements have been made. The results of operations for an interim period are not necessarily indicative of the results for the entire year.
	During the three and nine months ended September 30, 2013 and 2012, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying condensed consolidated interim statements of operations.  In addition, certain prior year balances have been reclassified to conform to the current presentation.
	Income taxes
	The Company complies with accounting and reporting requirements with respect to accounting for income taxes, which require an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized.
	In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.  Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets.  Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of September 30, 2013 and December 31, 2012.  The Company is subject to income tax examinations by major taxing authorities for all tax years since 2009 and may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof.  No interest expense or penalties have been recognized as of September 30, 2013 and December 31, 2012.  During the three month periods ended September 30, 2013 and 2012, the Company recognized no adjustments for uncertain tax positions.
	Earnings per share
	The Company complies with the accounting and disclosure requirements regarding earnings (loss) per share. Basic earnings per share excludes dilution and is computed by dividing earnings attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company.
	For the three and nine months ending September 30, 2013 and 2012, the following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:
		2013			2012
	Warrants		114,495,924			51,372,711
	Stock options		17,662,583			6,418,261
	Convertible preferred stock		7,669,838			7,299,510
			139,828,345			65,090,482
	The net loss per common share calculation includes a provision for preferred stock dividends on the Company’s outstanding Series A-1, A-2 and A-4 preferred stock in the approximate amount of $101,000 for the three months ended September 30, 2013 and 2012, and approximately $301,000 and $302,000 for the nine months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, the Board of Directors had not declared any dividends on the Company’s preferred stock, and the Company had accumulated approximately $3,428,000 of preferred stock dividends.
	Sale of accounts receivable
	The Company has an agreement to sell certain of its accounts receivable under an arrangement with a third party.  These transactions qualify as sales of financial assets under the criteria outlined in Accounting Standards Codification Topic (“ASC”) 860, Transfers and Servicing, in that the rights, title and interest to the receivables are transferred.  As a result, the Company accounts for the sales of its accounts receivable by derecognizing them from its consolidated balance sheet as of the date of sale and recording a loss on sale at the time the receivables are sold for the difference between the book value of the receivables sold and their respective purchase price.
	The Company recognized a loss on the sale of accounts receivable in the three and nine months ended September 30, 2013 of approximately $47,000 and $176,000, respectively.  For the three and nine months ended September 30, 2012 the Company recognized a loss on the sale of accounts receivable of approximately $66,000 and $235,000, respectively, and approximately $0.9 million and $2.4 million of the Company’s outstanding accounts receivable have been derecognized from the Company’s consolidated balance sheet as of September 30, 2013 and December 31, 2012, respectively.   The Company’s obligations to the purchaser of the receivables under the agreement are secured by a first priority lien on the accounts receivable of the Company’s Carrier Services business segment, and by a subordinated security interest on the other assets of the Company’s Carrier Services business segment.  Based on the Company’s evaluation of the creditworthiness of the customers whose receivables the Company sells under this arrangement, the Company does not believe that there is any significant credit risk related to those receivables.
	Goodwill
	At September 30, 2013 and December 31, 2012, the Company had goodwill in the amount of $2.6 million and $2.4 million, respectively, consisting of the excess of the acquisition cost over the fair value of the identifiable net assets acquired in connection with the Company’s acquisition of Network Billing Systems, LLC (“NBS”) on October 29, 2012.  Impairment testing for goodwill is performed annually in the Company’s fourth fiscal quarter or when indications of an impairment exist.  The Company has the option to perform a qualitative assessment to determine if the fair value of the entity is less than its carrying value. The impairment test for goodwill uses a two-step approach, which is performed at the reporting unit level. The Company has determined that its reporting units are its operating segments since that is the lowest level at which discrete, reliable financial and cash flow information is available. Step one compares the fair value of the reporting unit (calculated using a market approach and/or a discounted cash flow method) to its carrying value. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. Step two compares the carrying value of the reporting unit’s goodwill to its implied fair value, which is the fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets. If the implied fair value of goodwill is less than its carrying amount, an impairment is recognized.  The Company did not record any impairment charges during the nine months ended September 30, 2013.
	During the nine months ending September 30, 2013, the Company recorded an adjustment to the fair value of the accounts receivable of NBS as of the date of acquisition, with a corresponding increase to goodwill, in the amount of $0.2 million.
	Stock–based compensation
	The Company accounts for stock-based compensation by recognizing the fair value of the compensation cost for all stock awards over their respective service periods, which are generally equal to the vesting period.  This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the date of grant using the Black-Scholes option-pricing model.  An offsetting increase to stockholders' equity is recorded equal to the amount of the compensation expense charge.
	Stock-based compensation expense recognized in the condensed consolidated interim statements of operations for the three and nine months ended September 30, 2013 and 2012 includes compensation expense for stock-based payment awards granted prior to September 30, 2013 but not yet vested, based on the estimated grant date fair value.  As stock-based compensation expense recognized in the condensed consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. When estimating forfeitures, the Company considers historical forfeiture rates as well as ongoing trends for actual option forfeiture.
	The impact of stock-based compensation expense on the Company’s results of continuing operations was approximately $51,000 and $32,000 for the three months ended September 30, 2013 and 2012, respectively, and approximately $107,000 and $101,000 for the nine months ended September 30, 2013 and 2012, respectively.  These amounts are included in selling, general, and administrative expenses in the condensed consolidated interim statements of operations.
	The following table summarizes the stock option activity for the nine months ended September 30, 2013:
	Activity	(unaudited)			Weighted Average Exercise
		Number of Options			Price
	Outstanding at December 31, 2012		8,864,261		$	0.58
	Granted		9,043,610		$	0.08
	Forfeitures in 2013		(152,625	)	$	0.11
	Expirations in 2013		(92,663	)	$	1.03
	Outstanding at September 30, 2013		17,662,583		$	0.33
	Exercisable at September 30, 2013		5,295,100		$	0.89
	The Company calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model method with the following assumptions:
		(unaudited)
		Nine Months Ended September 30,
		2013			2012
	Dividend yield		0	%		0	%
	Stock volatility		137.2	%		111.2-148.7	%
	Average Risk-free interest rate		0.68	%		0.25-0.28	%
	Average option term (years)		3			4
	As of September 30, 2013, there was approximately $631,000 of total unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under the Company’s Stock Incentive Plans, which is expected to be recognized over a weighted-average period of 2.57 years.
	Advertising and marketing
	Advertising and marketing expense includes cost for promotional materials and trade show expenses for the marketing of the Company’s business products and services. Advertising and marketing expenses were approximately $9,000 and $0 for the three months ended September 30, 2013 and 2012, respectively, and approximately $25,000 and $8,000 for the nine months ended September 30, 2013 and 2012, respectively.
	Fair value of financial instruments
	The carrying amounts of the Company’s assets and liabilities approximate the fair value presented in the accompanying Condensed Consolidated Balance Sheets, due to their short-term maturities.
	Use of estimates
	The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the period.  Actual results could be affected by the accuracy of those estimates.
	Restricted cash
	Restricted cash at September 30, 2013 and December 31, 2012 includes $232,325 and $1,000,000 of cash held in reserve as required by the terms of the Company’s senior lending agreement (see notes 2 and 7), and certificates of deposit collateralizing a letter of credit in the aggregate amount of $163,711 and $26,326 at September 30, 2013 and December 31, 2012, respectively.  The letter of credit is required as security for one of the Company’s non-cancelable operating leases for office facilities.  The restricted cash balance at September 30, 2013 includes $122,500 of cash held in escrow from private placement efforts for which shares of the Company’s equity securities have not been issued.  The consolidated balance sheet at September 30, 2013 includes a corresponding escrow payable representing the Company’s obligation to issue such securities.

2_Going_Concern

2. Going Concern	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
2. Going Concern	'
	At September 30, 2013, the Company had a working capital deficit of $3.6 million and an accumulated deficit of $156.8 million. The Company has continued to sustain losses from operations and has not generated positive cash flow from operations since inception. The Company cannot provide any assurances if and when it will be able to attain profitability. During the nine months ended September 30, 2013, the Company raised approximately $3.6 million, net of expenses, from the sale of its equity securities.
	As more fully described in note 7, at various times subsequent to May 15, 2013 the Company was out of compliance with the minimum cash balance covenant contained in its senior lending agreement, which was the subject of a waiver and amendment agreement dated August 14, 2013. This agreement reduced the minimum cash balance requirement from $1.0 million to $0.5 million for the period from May 15, 2013 through August 31, 2013, after which time the minimum cash balance requirement reverted to $1 million. The Company has not been in compliance with the $1.0 million minimum cash balance requirement since August 31, 2013, and has entered into a second waiver and amendment agreement which amended the terms of its senior debt to provide that the Company shall maintain a minimum cash bank balance of no less than $1.0 million, in excess of any and all cash balances held by NBS, at all times following December 31, 2013 (see note 7).
	These conditions, among others, raise substantial doubt about the Company’s ability to continue operations as a going concern. No adjustment has been made in the condensed consolidated interim financial statements to the amounts and classification of assets and liabilities which could result should the Company be unable to continue as a going concern.

3_Acquisition

3. Acquisition	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
3. Acquisition	'
	As previously discussed in note 1, the Company acquired NBS on October 29, 2012.  Had the transaction taken place on January 1, 2012, the Company’s consolidated revenues and net loss for the three months ended September 30, 2012 would have approximately $16.7 million and $1.4 million, respectively, and the Company’s consolidated revenues and net loss for the nine months ended September 30, 2012 would have been approximately $52.1 million and $2.8 million, respectively.

4_Prepaid_Expenses_and_Other_C

4. Prepaid Expenses and Other Current Assets	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
4. Prepaid Expenses and Other Current Assets	'
	Prepaid expenses and other current assets consist of the following at September 30, 2013 and December 31, 2012:
		30-Sep-13		31-Dec-12
		(unaudited)
	Prepaid insurance	$	79,525	$	44,390
	Due from purchaser of accounts receivable		236,959		648,428
	Other prepaid expenses		242,572		308,631
	Total	$	559,056	$	1,001,449

5_Intangible_Assets

5. Intangible Assets	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
5. Intangible Assets	'
	Identifiable intangible assets as of September 30, 2013 and December 31, 2012 are comprised of:
		September 30, 2013 (unaudited)							31-Dec-12
		Gross Carrying Amount		Accumulated Amortization			Total		Gross Carrying Amount		Accumulated Amortization			Total
	Intangibles associated with the acquisition of NBS:
	Trademarks and tradename	$	563,000	$	(51,608	)	$	511,392	$	563,000	$	(9,383	)	$	553,617
	Proprietary technology		1,903,000		(348,883	)		1,554,117		1,903,000		(63,433	)		1,839,567
	Non-compete agreement		3,257,000		(995,194	)		2,261,806		3,257,000		(180,944	)		3,076,056
	Customer contracts		9,824,000		(593,205	)		9,230,795		9,824,000		(107,856	)		9,716,144
	Favorable lease intangible		218,000		(39,967	)		178,033		218,000		(7,267	)		210,733
	Total acquired intangibles		15,765,000		(2,028,857	)		13,736,143		15,765,000		(368,883	)		15,396,117
	Other intangibles:
	Trademarks		315,745		(315,745	)		-		315,745		(315,745	)		-
	Intellectual property		86,397		(86,397	)		-		86,397		(86,397	)		-
	Total	$	16,167,142	$	(2,430,999	)	$	13,736,143	$	16,167,142	$	(771,025	)	$	15,396,117
	Amortization expense was $553,325 and $29,052 for the three months ended September 30, 2013 and 2012, respectively, and $1,659,974 and $87,156 for the nine months ended September 30, 2013 and 2012, respectively.  Estimated future aggregate amortization expense is as follows for the periods indicated:
	Year ending December 31:
	2013	$	553,325
	2014		2,212,482
	2015		2,031,538
	2016		1,126,816
	2017		1,056,116

6_Accounts_Payable_and_Accrued

6. Accounts Payable and Accrued Expenses	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
6. Accounts Payable and Accrued Expenses	'
	Accounts payable and accrued expenses consist of the following at September 30, 2013 and December 31, 2012:
		30-Sep-13
		(unaudited)		31-Dec-12
	Trade accounts payable	$	5,739,625	$	8,800,525
	Accrued expenses		594,024		993,618
	Accrued payroll and vacation		79,688		113,860
	Interest payable		355,244		93,458
	Deferred revenue		13,536		21,947
	Other		856,309		556,088
	Total accounts payable and accrued expenses	$	7,638,426	$	10,579,496

7_Notes_Payable_NonRelated_Par

7. Notes Payable Non-Related Parties	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
7. Notes Payable - Non-Related Parties	'
	At September 30, 2013 and December 31, 2012, components of notes payable – non-related parties are comprised of the following:
		30-Sep-13			31-Dec-12
	Senior Notes	$	16,447,917		$	16,500,000
	Discount on Senior Notes		(1,577,661	)		(1,815,920	)
	Total notes payable - non-related parties		14,870,256			14,684,080
	Less:
	Current portion of Senior Notes		(625,000	)		(208,333	)
	Non-current portion notes payable - non-related parties	$	14,245,256		$	14,475,747
	Senior Notes
	On October 29, 2012, the Company and its wholly-owned subsidiary, Fusion NBS Acquisition Corp. (“FNAC”), entered into a Securities Purchase Agreement and Security Agreement (the “SPA”) with Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP and Plexus Fund II, LP (the “Lenders”). Under the SPA, the Company sold the Lenders (a) five-year Series A senior notes (the “Series A Notes”) in the aggregate principal amount of $6.5 million, bearing interest at the rate of 10.0% annually, and (b) five-year Series B senior notes (the “Series B Notes”, and together with the Series A Notes, the “Senior Notes”) in the aggregate principal amount of $10.0 million bearing interest at the rate of 11.5% annually.  The proceeds from the sale of the Senior Notes were used to finance the acquisition of NBS.
	All of the Senior Notes provide for the payment of interest on a monthly basis. The Series A Notes provide for monthly principal payments in the amount of $52,083 each, beginning September 30, 2013, with the outstanding principal balance being due and payable on October 27, 2017.  The outstanding principal balance of the Series B Notes becomes due and payable on October 27, 2017.
	The obligations to the Lenders are secured by first priority security interests on all of the assets of FNAC and NBS, as well as the capital stock of each of the Company’s subsidiaries, including NBS, and by second priority security interests in the accounts receivable pertaining to the Company’s Carrier Services business segment and all of the other assets of the Company.  In addition, Fusion and NBS have guaranteed FNAC’s obligations under the SPA, including FNAC’s obligation to repay the Senior Notes.
	The SPA contains a number of affirmative and negative covenants, including but not limited to, restrictions on paying indebtedness subordinate to the Senior Notes, incurring additional indebtedness, making capital expenditures, dividend payments and cash distributions by subsidiaries. In addition, at all times while the Senior Notes are outstanding, the Company is required to maintain a minimum cash bank balance of no less than $1 million in excess of any amounts outstanding under a permitted working capital line of credit and in excess of any and all cash balances held by NBS. The SPA also requires on-going compliance with various financial covenants, including leverage ratio, fixed charge coverage ratio and minimum levels of earnings before interest, taxes, depreciation and amortization. Failure to comply with any of the restrictive or financial covenants could result in an event of default and accelerated demand for repayment of the Senior Notes. At various times since May 15, 2013, the Company was not in compliance with the $1.0 million minimum cash balance requirement under the SPA. On August 14, 2013, the Company and the Lenders entered into a Waiver and Amendment Agreement to the SPA (the “First Waiver Agreement”) whereby the Lenders agreed to waive compliance with the $1.0 million minimum cash balance requirement through August 14, 2013, and amended the SPA to reduce the minimum cash balance requirement from $1.0 million to $0.5 million for the period between May 15, 2013 and August 31, 2013, after which time the minimum cash balance requirement reverted to $1.0 million. The Company was in compliance with the financial covenants of the SPA as amended by the First Waiver Agreement through August 30, 2013, however the Company has been out of compliance with the $1.0 million minimum cash balance requirement since August 31, 2013. At September 30, 2013 the Company was in compliance with all of the other financial covenants under the Senior Notes. On November 12, 2013, the Company entered into a Waiver and Second Amendment Agreement to the SPA (the “Second Waiver Agreement”) which amended the SPA to provide that the Company shall maintain a minimum cash bank balance of no less than $1.0 million, in excess of any and all cash balances held by NBS, at all times following December 31, 2013.
	The Company recorded a discount on the Senior Notes based on the fair value of the Lenders’ Warrant as of the date of issuance, which was $1,865,500.  The discount is being accreted over the life of the Senior Notes, and the discount was $1,577,661 and $1,815,920 as of September 30, 2013 and December 31, 2012, respectively.  In addition, the Lenders’ Warrant does not meet the criteria for equity classification under ASC Topic 480, Distinguishing Liabilities From Equity, and is not considered to be indexed to the Company’s own stock under the guidance provided in ASC Topic 815, Derivatives and Hedging.  As a result, the Company recognized a derivative liability in the amount of $1,865,500 upon the issuance of the Lenders' Warrant.  At September 30, 2013 and December 31, 2012, the fair value of the derivative liability was $1,798,875 and $1,066,000, respectively, and the Company recognized a loss on the change in fair value of $732,875 for the nine months ended September 30, 2013.
	Other notes payable
	During the first nine months of 2013, the Company received advances from the purchaser of its accounts receivable (see note 1) totaling $212,500.  This amount is in addition to the proceeds received by the Company for the sale of accounts receivable.  The Company repaid the entire amount of this advance during the period, along with advance fees of approximately $9,000.  These fees are reflected in Other expenses, net in the Company’s consolidated statement of operations for the nine months ended September 30, 2013.

8_Notes_PayableRelated_Parties

8. Notes Payable-Related Parties	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
8. Notes Payable-Related Parties	'
	At September 30, 2013 and December 31, 2012, components of notes payable – related parties are comprised of the following:
		30-Sep-13			31-Dec-12
	NBS Sellers Notes	$	214,286		$	600,000
	Notes payable to Marvin Rosen		3,578,071			4,406,422
	Other notes payable - related parties		125,000			125,000
	Total notes payable - related parties		3,917,357			5,131,422
	Less:
	Current portion of NBS Sellers Notes		(214,286	)		(514,286	)
	Current portion of notes payable to Marvin Rosen		(100,000	)		-
	Current portion of other notes payable		(125,000	)		(125,000	)
	Non-current portion notes payable - related parties	$	3,478,071		$	4,492,136
	Sellers Notes
	As part of the purchase price of NBS, FNAC issued promissory notes (the “Sellers Notes”) to Jonathan Kaufman and entities affiliated with Mr. Kaufman, (the “Sellers of NBS”) in the principal amount of $600,000.  The Sellers Notes bear interest at 3% per annum, are payable in fourteen equal monthly installments commencing January 31, 2013 and are unsecured.  The Sellers Notes are subject to the terms of a subordination agreement with the Lenders.  Repayment of the Sellers Notes is guaranteed by the Company and NBS.  Upon the closing of the acquisition of NBS, Mr. Kaufman became President of the Company’s Business Services division and an executive officer of the Company.
	Notes Payable to Marvin Rosen
	In conjunction with the Company’s sale of the Senior Notes to the Lenders in October of 2012, Marvin Rosen, the Company’s Chairman of the Board of Directors, entered into an Intercreditor and Subordination agreement with the Company and the Lenders (the “Subordination Agreement”), whereby Mr. Rosen agreed, among other things, that other than payments permitted by the Lenders, the amounts owed to him by the Company would be subordinate to the Senior Notes and the Company’s other obligations to the Lenders.  In connection with this agreement, on October 25, 2012 Mr. Rosen agreed to consolidate the principal amount of all his then outstanding promissory notes aggregating to $3,922,364 into a new single note (the “New Rosen Note”).  The New Rosen Note is not secured, pays interest monthly at a rate of 7% per annum, and matures 60 days after the Senior Notes are paid in full.  Accrued interest on the outstanding promissory notes as of October 24, 2012 amounted to approximately $484,000, and this amount, together with 7% annual interest, is reflected in Notes payable – related parties on the Company’s consolidated balance sheet as of December 31, 2012.
	On March 1, 2013, the Company received a short-term unsecured advance from Mr. Rosen in the amount of $100,000, which remains outstanding as of September 30, 2013.  The Lenders have approved the repayment of this advance from the proceeds from certain future sales of the Company’s equity securities. During the first nine months of 2013, Mr. Rosen converted $895,000 of the New Rosen Note into 10,443,772 shares of common stock and warrants to purchase 5,221,886 shares of the Company’s common stock.  The warrants are exercisable at 125% of the volume-weighted average price of the Company’s common stock for the 10 trading days prior to the date of conversion.

9_Equity_Transactions

9. Equity Transactions	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
9. Equity Transactions	'
	At various times during the first nine months of 2013, the Company entered into subscription agreements with 47 accredited investors, under which the Company issued an aggregate of 45,960,218 shares of common stock and five-year warrants to purchase 22,980,110 shares of the Company’s common stock for aggregate consideration of $3.6 million.   The warrants are exercisable at 125% of the volume weighted-average price of the Company’s common stock for the 10 trading days prior to the date of closing.
	Also during the first nine months of 2013, an executive officer of the Company converted $102,500 due to him into 1,177,965 shares of common stock and warrants to purchase 588,983 shares of the Company’s common stock, and another director of the Company converted $5,733 due to him into 76,237 shares of common stock and warrants to purchase 38,119 shares of common stock.  The warrants are exercisable at 125% of the volume weighted-average price of the Company’s common stock for the 10 trading days prior to the date of conversion.  In connection with these conversions, and the conversions discussed in note 8, the Company recognized a loss on the extinguishment of debt for the three and nine months ended September 30, 2013 in the amount of $291,995 and $442,574, respectively.
	Effective as of September 30, 2013, all of the Company’s outstanding Series B-1 Preferred Stock was converted into 62,672,008 shares of the Company’s common stock in accordance with the terms of the Series B-1 Preferred Stock.
	During the nine months ended September 30, 2013, the Company issued an aggregate of 686,381 shares of common stock to third parties for services valued at $96,845.

10_Recently_Adopted_and_Issued

10. Recently Adopted and Issued Accounting Pronouncements	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
10. Recently Adopted and Issued Accounting Pronouncements	'
	During the nine months ended September 30, 2013 and 2012 there were no new accounting pronouncements adopted by the Company that had a material impact on the Company’s consolidated financial statements.  Management does not believe there are any recently issued, but not yet effective, accounting pronouncements, if currently adopted, that would have a material effect on the Company’s consolidated financial statements.

11_Commitments_and_Contingenci

11. Commitments and Contingencies	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
11. Commitments and Contingencies	'
	Legal matters
	On March 12, 2013, a landlord over premises leased by the Company commenced a lawsuit in the New York City Civil Court, County of New York (Index No. 58738/13), in which the landlord is seeking to recover specified rent and related charges of approximately $97,000 due under a lease agreement between the landlord and the Company, and, as a result thereof, to evict the Company from the premises.  The Company has since made all of the payments demanded by the landlord in the lawsuit, and the lawsuit has been dismissed.
	On or about September 4, 2013, a landlord over premises leased by the Company commenced a lawsuit in the New York City Civil Court, County of New York (Index No. 79154/13), in which the landlord is seeking to recover specified rent and related charges of approximately $88,000 due under a lease agreement between the landlord and the Company, plus interest and attorneys’ fees, and to evict the Company from the premises.  The Company intends to contest and dispute the claims set forth in the landlord’s petition.  However, due to the uncertainties of litigation and other unknown factors, there can be no assurances that the Company will be able to reach a favorable resolution to this proceeding.
	The Company is from time to time involved in claims and legal actions arising in the ordinary course of business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s operations or financial condition.  In addition, due to the regulatory nature of the telecommunications industry, the Company periodically receives and responds to various inquiries from state and federal regulatory agencies.  Management does not expect the outcome of any such regulatory inquiries to have a material impact on the Company’s liquidity, results of operations or financial condition.
	Proposed Acquisition
	On August 30, 2013, the Company and its newly-formed subsidiary, Fusion Broadvox Acquisition Corp. (“FBAC”), entered into an Asset Purchase and Sale Agreement (the “Agreement”) to acquire specified assets owned by BroadvoxGo! LLC and Cypress Communications, LLC (collectively, the “Sellers”) and used in the operation of the cloud communications services segment of the Sellers’ business (the “Acquired Business”). The Company also agreed to assume substantially all of the on-going liabilities of the Acquired Business incurred in the ordinary course of business.
	The aggregate purchase price for the assets to be purchased from the Sellers, net of the assumed liabilities, is $32.1 million (subject to adjustment as provided in the Agreement), payable in cash, at closing. In accordance with the Agreement, the Company delivered $200,000 into escrow as a good faith deposit to be refunded to the Company only under certain limited circumstances, such as Sellers’ wrongful failure to complete the sale or the Company’s termination of the Agreement due to Sellers’ failure to satisfy a condition precedent to closing not waived by the Company.
	While the Agreement contemplates that a closing of the sale of the Acquired Business will take place in the fourth quarter of 2013, the conditions precedent to closing are such that there can be no assurance that the Company will complete its acquisition of the Acquired Business in that time or at all.
	Other matters
	The Company’s operations were impacted by Hurricane Sandy in October of 2012, and the Company filed a business interruption insurance claim with its insurance carrier for the Company’s estimate of losses it incurred as a result of the storm.  The Company’s consolidated statement of operations for the three months ended September 30, 2013 reflects insurance proceeds received in the amount of $85,000, which is reflected as a reduction to Cost of sales in the Company’s Carrier Services business segment.  The Company’s consolidated statement of operations for the nine months ended September 30, 2013 reflects approximately $248,000 of insurance proceeds, of which approximately $109,000 is reflected as Revenues, $85,000 is reflected as a reduction in Cost of sales and the remainder as a reduction to Selling, general and administrative expenses.

12_Segment_Information

12. Segment Information	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
12. Segment Information	'
	The Company complies with the accounting and reporting requirements on Disclosures about Segments of an Enterprise and Related Information.  The guidance requires disclosures of segment information on the basis that is used internally for evaluating segment performance and for determining the allocation of resources to the operating segments.
	The Company has two reportable segments that it operates and manages – Carrier Services and Business Services. These segments are organized by the products and services that are sold and the customers that are served. The Company measures and evaluates its reportable segments based on revenues and gross profit margins.  The Company’s executive, administrative and support costs are allocated to the Company’s operating segments and are included in segment income.  The Company’s segments and their principal activities consist of the following:
	Carrier Services
	Carrier Services includes the termination of carrier traffic utilizing primarily Voice over Internet Protocol (“VoIP”) technology.  VoIP permits a less costly and more rapid interconnection between the Company and international telecommunications carriers, and generally provides better profit margins for the Company than other technologies.  The Company currently interconnects with over 270 carrier customers and vendors, and is working to expand its interconnection relationships, particularly with carriers in emerging markets.
	Business Services
	The Company provides a full portfolio of cloud communications, cloud connectivity, storage and security solutions to small, medium and large businesses. These services are sold through both the Company’s direct sales force and its partner sales program, which utilizes the efforts of independent third-party distributors to sell the Company’s products and services.  The Business Services segment includes the results of operations of NBS effective as of October 29, 2012.
	Operating segment information for the three and nine months ended September 30, 2013 and 2012 is summarized as follows:
	Three Months Ended September 30, 2013
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	7,026,589		$	7,785,239		$	-	$	14,811,828
	Cost of revenues (exclusive of
	depreciation and amortization)		6,167,706			3,786,028			-		9,953,734
	Gross profit		858,883			3,999,211			-		4,858,094
	Depreciation and amortization		83,665			827,948			-		911,613
	Selling, general and administrative expenses		1,667,067			2,645,441			-		4,312,508
	Interest expense		82,617			581,072					663,689
	Other (income) expenses		1,153,973			(16,807	)		-		1,137,166
	(Loss) gain on extinguishment of accounts payable		(25,222	)		-			-		(25,222	)
	Net income (loss)	$	(2,153,661	)	$	(38,443	)	$	-	$	(2,192,104	)
	Total assets	$	2,862,749		$	22,918,730		$	897,478	$	26,678,957
	Three Months Ended September 30, 2012
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	9,383,989		$	575,976		$	-	$	9,959,965
	Cost of revenues (exclusive of
	depreciation and amortization)		8,821,004			343,243			-		9,164,247
	Gross profit		562,985			232,733			-		795,718
	Depreciation and amortization		82,618			11,808			-		94,426
	Selling, general and administrative expenses		1,265,538			950,213			-		2,215,751
	Interest expense		28,430			28,431					56,861
	Other expenses (income)		66,002			(2,426	)		-		63,576
	Net loss	$	(879,603	)	$	(755,293	)	$	-	$	(1,634,896	)
	Total assets	$	1,773,957		$	1,340,857		$	4,248,833	$	7,363,647
	Nine Months Ended September 30, 2013
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	22,458,404		$	22,752,023		$	-	$	45,210,427
	Cost of revenues (exclusive of
	depreciation and amortization)		20,088,181			11,222,683			-		31,310,864
	Gross profit		2,370,223			11,529,340			-		13,899,563
	Depreciation and amortization		222,742			2,411,370			-		2,634,112
	Selling, general and administrative expenses		5,330,703			7,683,251			-		13,013,954
	Interest expense		263,045			1,729,894					1,992,939
	Other (income) expenses		774,767			470,062			-		1,244,829
	Gain on extinguishment of accounts payable		2,883,660								2,883,660
	Net income (loss)	$	(1,337,374	)	$	(765,237	)	$	-	$	(2,102,611	)
	Capital expenditures	$	142,937		$	683,306		$	17,497	$	843,740
	Nine Months Ended September 30, 2012
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	29,965,082		$	1,749,023		$	-	$	31,714,105
	Cost of revenues (exclusive of
	depreciation and amortization)		27,083,520			1,089,276			-		28,172,796
	Gross profit		2,881,562			659,747			-		3,541,309
	Depreciation and amortization		252,677			33,926			-		286,603
	Selling, general and administrative expenses		3,747,117			2,778,160			-		6,525,277
	Interest expense		80,238			80,239					160,477
	Other expenses (income)		234,715			(10,296	)		-		224,419
	Net loss	$	(1,433,185	)	$	(2,222,282	)	$	-	$	(3,655,467	)
	Capital expenditures	$	75,220		$	2,073		$	4,271	$	81,564

13_Other_Income_and_Expenses

13. Other Income and Expenses	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
13. Other Income and Expenses	'
	Other (expenses) income for the three and nine months ended September 30, 2013 and 2012 consists of the following:
		Three Months ended September 30,						Nine Months ended September 30,
		2013			2012			2013			2012
	Loss on sale of accounts receivable	$	(47,093	)	$	(66,230	)	$	(175,862	)	$	(235,044	)
	Change in fair value of derivative liability		(838,142	)		-			(732,875	)		-
	Loss on disposal of property and equipment		(2,374	)		-			(2,374	)
	Other		42,438			2,654			108,856			10,625
	Total other income (expenses)	$	(845,171	)	$	(63,576	)	$	(802,255	)	$	(224,419	)

14_Gain_on_Extinguishment_of_A

14. Gain on Extinguishment of Accounts Payable	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Gain on Extinguishment of Accounts Payable	'
	In June of  2013, pursuant to the advice of counsel and based on applicable laws, the Company determined that it no longer had any liability pertaining to a trade payable in the amount $2,908,882.  As a result, the Company derecognized the payable from its consolidated balance sheet at September 30, 2013 and recorded a corresponding gain on the extinguishment of debt, net of legal fees in the amount of $25,222.

15_Supplemental_Disclosure_of_

15. Supplemental Disclosure of Cash Flow Information	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Supplemental Disclosure of Cash Flow Information	'
		Nine months ended September 30,
		2013		2012
	Cash paid for interest	$	1,395,799	$	32,074
	Supplemental schedule of non-cash financing activities:
	Conversion of notes and interest payable - related parties to common stock	$	895,000	$	125,000
	Conversion of accounts payable - related parties to common stock	$	126,858	$	35,000
	Assets acquired under capital leases	$	359,675	$	-

16_Related_Party_Transactions

16. Related Party Transactions	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
14. Related Party Transactions	'
	Upon the closing of the acquisition of NBS on October 29, 2012, the purchase price was adjusted for an additional amount payable to the Sellers of NBS of approximately $1.1 million following the application of certain working capital adjustments as set forth in the purchase agreements.  Approximately $668,000 and $1,159,000 remained outstanding to the Sellers of NBS as of September 30, 2013 and December 31, 2012, respectively.  These amounts, which include accrued and unpaid interest of $49,710 and $0 at September 30, 2013 and December 31, 2012, respectively, are reflected in Related party payable in the accompanying consolidated balance sheets.
	In addition to the debt and equity transactions discussed in notes 8 and 9, the Company’s Desk Space Use and Occupancy Agreement that was entered into on March 29, 2011 with an entity affiliated with Marvin Rosen continues on a month to month basis.  Under the revised terms of the agreement, this affiliate utilizes a portion of the Company’s leased office space in New York City for a fee of $3,000 per month.

17_Fair_Value_Disclosures

17. Fair Value Disclosures	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
15. Fair Value Disclosures	'
	Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:
	Level 1—Quoted prices in active markets for identical assets or liabilities
	Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities
	Level 3—No observable pricing inputs in the market
	The following table represents the fair value of the liability measured at fair value on a recurring basis:
		Level 1		Level 2		Level 3		Total
	As of September 30, 2013
	Non-current liabilities:
	Derivative liability (see note 7)	$	-	$	1,798,875	$	-	$	1,798,875
	As of December 31, 2012
	Non-current liabilities:
	Derivative liability	$	-	$	1,066,000	$	-	$	1,066,000

18_Subsequent_Events

18. Subsequent Events	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Subsequent Events	'
	In October of 2013, the Company entered into subscription agreements with 13 accredited investors, under which the Company issued an aggregate of 4,296,945 shares of common stock and five-year warrants to purchase 2,148,473 shares of the Company’s common stock for aggregate consideration of $0.6 million.  The warrants are exercisable at 125% of the volume-weighted average price of the Company’s common stock for the 10 trading days prior to the date of closing.  In addition, the Company issued 269,183 shares of common stock valued at approximately $25,000 to a third party as partial payment for services rendered.
	On November 12, 2013, the Company entered into the Second Waiver Agreement to provide that the Company shall maintain a minimum cash bank balance of no less than $1.0 million, in excess of any and all cash balances held by NBS, at all times following December 31, 2013.

1_Basis_of_Presentation_Consol1

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Basis of Presentation, Consolidation	'
	The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2012 for Fusion Telecommunications International, Inc. and its Subsidiaries (collectively, the “Company”).  These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”) and therefore omit or condense certain footnotes and other information normally included in condensed consolidated interim financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  All material intercompany balances and transactions have been eliminated in consolidation.  In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the condensed consolidated interim financial statements have been made. The results of operations for an interim period are not necessarily indicative of the results for the entire year.
	During the three and nine months ended September 30, 2013 and 2012, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying condensed consolidated interim statements of operations.  In addition, certain prior year balances have been reclassified to conform to the current presentation.
Income taxes	'
	The Company complies with accounting and reporting requirements with respect to accounting for income taxes, which require an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized.
	In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.  Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets.  Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of September 30, 2013 and December 31, 2012.  The Company is subject to income tax examinations by major taxing authorities for all tax years since 2009 and may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof.  No interest expense or penalties have been recognized as of September 30, 2013 and December 31, 2012.  During the three month periods ended September 30, 2013 and 2012, the Company recognized no adjustments for uncertain tax positions.
Earnings per share	'
	The Company complies with the accounting and disclosure requirements regarding earnings (loss) per share. Basic earnings per share excludes dilution and is computed by dividing earnings attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company.
	For the three and nine months ending September 30, 2013 and 2012, the following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:
		2013			2012
	Warrants		114,495,924			51,372,711
	Stock options		17,662,583			6,418,261
	Convertible preferred stock		7,669,838			7,299,510
			139,828,345			65,090,482
	The net loss per common share calculation includes a provision for preferred stock dividends on the Company’s outstanding Series A-1, A-2 and A-4 preferred stock in the approximate amount of $101,000 for the three months ended September 30, 2013 and 2012, and approximately $301,000 and $302,000 for the nine months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, the Board of Directors had not declared any dividends on the Company’s preferred stock, and the Company had accumulated approximately $3,428,000 of preferred stock dividends.
Sale of accounts receivable	'
	The Company has an agreement to sell certain of its accounts receivable under an arrangement with a third party.  These transactions qualify as sales of financial assets under the criteria outlined in Accounting Standards Codification Topic (“ASC”) 860, Transfers and Servicing, in that the rights, title and interest to the receivables are transferred.  As a result, the Company accounts for the sales of its accounts receivable by derecognizing them from its consolidated balance sheet as of the date of sale and recording a loss on sale at the time the receivables are sold for the difference between the book value of the receivables sold and their respective purchase price.
	The Company recognized a loss on the sale of accounts receivable in the three and nine months ended September 30, 2013 of approximately $47,000 and $176,000, respectively.  For the three and nine months ended September 30, 2012 the Company recognized a loss on the sale of accounts receivable of approximately $66,000 and $235,000, respectively, and approximately $0.9 million and $2.4 million of the Company’s outstanding accounts receivable have been derecognized from the Company’s consolidated balance sheet as of September 30, 2013 and December 31, 2012, respectively.   The Company’s obligations to the purchaser of the receivables under the agreement are secured by a first priority lien on the accounts receivable of the Company’s Carrier Services business segment, and by a subordinated security interest on the other assets of the Company’s Carrier Services business segment.  Based on the Company’s evaluation of the creditworthiness of the customers whose receivables the Company sells under this arrangement, the Company does not believe that there is any significant credit risk related to those receivables.
Goodwill	'
	At September 30, 2013 and December 31, 2012, the Company had goodwill in the amount of $2.6 million and $2.4 million, respectively, consisting of the excess of the acquisition cost over the fair value of the identifiable net assets acquired in connection with the Company’s acquisition of Network Billing Systems, LLC (“NBS”) on October 29, 2012.  Impairment testing for goodwill is performed annually in the Company’s fourth fiscal quarter or when indications of an impairment exist.  The Company has the option to perform a qualitative assessment to determine if the fair value of the entity is less than its carrying value. The impairment test for goodwill uses a two-step approach, which is performed at the reporting unit level. The Company has determined that its reporting units are its operating segments since that is the lowest level at which discrete, reliable financial and cash flow information is available. Step one compares the fair value of the reporting unit (calculated using a market approach and/or a discounted cash flow method) to its carrying value. If the carrying value exceeds the fair value, there is a potential impairment and step two must be performed. Step two compares the carrying value of the reporting unit’s goodwill to its implied fair value, which is the fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets. If the implied fair value of goodwill is less than its carrying amount, an impairment is recognized.  The Company did not record any impairment charges during the nine months ended September 30, 2013.
	During the nine months ending September 30, 2013, the Company recorded an adjustment to the fair value of the accounts receivable of NBS as of the date of acquisition, with a corresponding increase to goodwill, in the amount of $0.2 million.
Stock based compensation	'
	The Company accounts for stock-based compensation by recognizing the fair value of the compensation cost for all stock awards over their respective service periods, which are generally equal to the vesting period.  This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the date of grant using the Black-Scholes option-pricing model.  An offsetting increase to stockholders' equity is recorded equal to the amount of the compensation expense charge.
	Stock-based compensation expense recognized in the condensed consolidated interim statements of operations for the three and nine months ended September 30, 2013 and 2012 includes compensation expense for stock-based payment awards granted prior to September 30, 2013 but not yet vested, based on the estimated grant date fair value.  As stock-based compensation expense recognized in the condensed consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. When estimating forfeitures, the Company considers historical forfeiture rates as well as ongoing trends for actual option forfeiture.
	The impact of stock-based compensation expense on the Company’s results of continuing operations was approximately $51,000 and $32,000 for the three months ended September 30, 2013 and 2012, respectively, and approximately $107,000 and $101,000 for the nine months ended September 30, 2013 and 2012, respectively.  These amounts are included in selling, general, and administrative expenses in the condensed consolidated interim statements of operations.
	The following table summarizes the stock option activity for the nine months ended September 30, 2013:
	Activity	(unaudited)			Weighted Average Exercise
		Number of Options			Price
	Outstanding at December 31, 2012		8,864,261		$	0.58
	Granted		9,043,610		$	0.08
	Forfeitures in 2013		(152,625	)	$	0.11
	Expirations in 2013		(92,663	)	$	1.03
	Outstanding at September 30, 2013		17,662,583		$	0.33
	Exercisable at September 30, 2013		5,295,100		$	0.89
	The Company calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model method with the following assumptions:
		(unaudited)
		Nine Months Ended September 30,
		2013			2012
	Dividend yield		0	%		0	%
	Stock volatility		137.2	%		111.2-148.7	%
	Average Risk-free interest rate		0.68	%		0.25-0.28	%
	Average option term (years)		3			4
	As of September 30, 2013, there was approximately $631,000 of total unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under the Company’s Stock Incentive Plans, which is expected to be recognized over a weighted-average period of 2.57 years.
Advertising and Marketing	'
	Advertising and marketing expense includes cost for promotional materials and trade show expenses for the marketing of the Company’s business products and services. Advertising and marketing expenses were approximately $9,000 and $0 for the three months ended September 30, 2013 and 2012, respectively, and approximately $25,000 and $8,000 for the nine months ended September 30, 2013 and 2012, respectively.
Fair value of financial instruments	'
	The carrying amounts of the Company’s assets and liabilities approximate the fair value presented in the accompanying Condensed Consolidated Balance Sheets, due to their short-term maturities.
Use of estimates	'
	The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the period.  Actual results could be affected by the accuracy of those estimates.
Restricted cash	'
	Restricted cash at September 30, 2013 and December 31, 2012 includes $232,325 and $1,000,000 of cash held in reserve as required by the terms of the Company’s senior lending agreement (see notes 2 and 7), and certificates of deposit collateralizing a letter of credit in the aggregate amount of $163,711 and $26,326 at September 30, 2013 and December 31, 2012, respectively.  The letter of credit is required as security for one of the Company’s non-cancelable operating leases for office facilities.  The restricted cash balance at September 30, 2013 includes $122,500 of cash held in escrow from private placement efforts for which shares of the Company’s equity securities have not been issued.  The consolidated balance sheet at September 30, 2013 includes a corresponding escrow payable representing the Company’s obligation to issue such securities.

1_Basis_of_Presentation_Consol2

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Following securities were excluded in the calculation of diluted loss per share	'
	For the three and nine months ending September 30, 2013 and 2012, the following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:
		2013			2012
	Warrants		114,495,924			51,372,711
	Stock options		17,662,583			6,418,261
	Convertible preferred stock		7,669,838			7,299,510
			139,828,345			65,090,482
The following table summarizes the stock option activity	'
	The following table summarizes the stock option activity for the nine months ended September 30, 2013:
	Activity	(unaudited)			Weighted Average Exercise
		Number of Options			Price
	Outstanding at December 31, 2012		8,864,261		$	0.58
	Granted		9,043,610		$	0.08
	Forfeitures in 2013		(152,625	)	$	0.11
	Expirations in 2013		(92,663	)	$	1.03
	Outstanding at September 30, 2013		17,662,583		$	0.33
	Exercisable at September 30, 2013		5,295,100		$	0.89
Calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model	'
	The Company calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model method with the following assumptions:
		(unaudited)
		Nine Months Ended September 30,
		2013			2012
	Dividend yield		0	%		0	%
	Stock volatility		137.2	%		111.2-148.7	%
	Average Risk-free interest rate		0.68	%		0.25-0.28	%
	Average option term (years)		3			4

4_Prepaid_Expenses_and_Other_C1

4. Prepaid Expenses and Other Current Assets (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Prepaid expenses and other current assets	'
	Prepaid expenses and other current assets consist of the following at September 30, 2013 and December 31, 2012:
		30-Sep-13		31-Dec-12
		(unaudited)
	Prepaid insurance	$	79,525	$	44,390
	Due from purchaser of accounts receivable		236,959		648,428
	Other prepaid expenses		242,572		308,631
	Total	$	559,056	$	1,001,449

5_Intangible_Assets_Tables

5. Intangible Assets (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Identifiable intangible assets	'
	Identifiable intangible assets as of September 30, 2013 and December 31, 2012 are comprised of:
		September 30, 2013 (unaudited)							31-Dec-12
		Gross Carrying Amount		Accumulated Amortization			Total		Gross Carrying Amount		Accumulated Amortization			Total
	Intangibles associated with the acquisition of NBS:
	Trademarks and tradename	$	563,000	$	(51,608	)	$	511,392	$	563,000	$	(9,383	)	$	553,617
	Proprietary technology		1,903,000		(348,883	)		1,554,117		1,903,000		(63,433	)		1,839,567
	Non-compete agreement		3,257,000		(995,194	)		2,261,806		3,257,000		(180,944	)		3,076,056
	Customer contracts		9,824,000		(593,205	)		9,230,795		9,824,000		(107,856	)		9,716,144
	Favorable lease intangible		218,000		(39,967	)		178,033		218,000		(7,267	)		210,733
	Total acquired intangibles		15,765,000		(2,028,857	)		13,736,143		15,765,000		(368,883	)		15,396,117
	Other intangibles:
	Trademarks		315,745		(315,745	)		-		315,745		(315,745	)		-
	Intellectual property		86,397		(86,397	)		-		86,397		(86,397	)		-
	Total	$	16,167,142	$	(2,430,999	)	$	13,736,143	$	16,167,142	$	(771,025	)	$	15,396,117
Estimated future aggregate amortization expense	'
	Estimated future aggregate amortization expense is as follows for the periods indicated:
	Year ending December 31:
	2013	$	553,325
	2014		2,212,482
	2015		2,031,538
	2016		1,126,816
	2017		1,056,116

6_Accounts_Payable_and_Accrued1

6. Accounts Payable and Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Accounts payable and accrued expenses	'
	Accounts payable and accrued expenses consist of the following at September 30, 2013 and December 31, 2012:
		30-Sep-13
		(unaudited)		31-Dec-12
	Trade accounts payable	$	5,739,625	$	8,800,525
	Accrued expenses		594,024		993,618
	Accrued payroll and vacation		79,688		113,860
	Interest payable		355,244		93,458
	Deferred revenue		13,536		21,947
	Other		856,309		556,088
	Total accounts payable and accrued expenses	$	7,638,426	$	10,579,496

7_Notes_Payable_NonRelated_Par1

7. Notes Payable Non-Related Parties (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Components of notes payable non-related parties	'
	At September 30, 2013 and December 31, 2012, components of notes payable – non-related parties are comprised of the following:
		30-Sep-13			31-Dec-12
	Senior Notes	$	16,447,917		$	16,500,000
	Discount on Senior Notes		(1,577,661	)		(1,815,920	)
	Total notes payable - non-related parties		14,870,256			14,684,080
	Less:
	Current portion of Senior Notes		(625,000	)		(208,333	)
	Non-current portion notes payable - non-related parties	$	14,245,256		$	14,475,747

8_Notes_Payable_Related_Partie

8. Notes Payable Related Parties (Tables)	9 Months Ended
	Sep. 30, 2013
Notes Payable Related Parties Tables	'
Component of notes payable related party	'
	At September 30, 2013 and December 31, 2012, components of notes payable – related parties are comprised of the following:
		30-Sep-13			31-Dec-12
	NBS Sellers Notes	$	214,286		$	600,000
	Notes payable to Marvin Rosen		3,578,071			4,406,422
	Other notes payable - related parties		125,000			125,000
	Total notes payable - related parties		3,917,357			5,131,422
	Less:
	Current portion of NBS Sellers Notes		(214,286	)		(514,286	)
	Current portion of notes payable to Marvin Rosen		(100,000	)		-
	Current portion of other notes payable		(125,000	)		(125,000	)
	Non-current portion notes payable - related parties	$	3,478,071		$	4,492,136

12_Segment_Information_Tables

12. Segment Information (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Operating segment information	'
	Operating segment information for the three and nine months ended September 30, 2013 and 2012 is summarized as follows:
	Three Months Ended September 30, 2013
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	7,026,589		$	7,785,239		$	-	$	14,811,828
	Cost of revenues (exclusive of
	depreciation and amortization)		6,167,706			3,786,028			-		9,953,734
	Gross profit		858,883			3,999,211			-		4,858,094
	Depreciation and amortization		83,665			827,948			-		911,613
	Selling, general and administrative expenses		1,667,067			2,645,441			-		4,312,508
	Interest expense		82,617			581,072					663,689
	Other (income) expenses		1,153,973			(16,807	)		-		1,137,166
	(Loss) gain on extinguishment of accounts payable		(25,222	)		-			-		(25,222	)
	Net income (loss)	$	(2,153,661	)	$	(38,443	)	$	-	$	(2,192,104	)
	Total assets	$	2,862,749		$	22,918,730		$	897,478	$	26,678,957
	Three Months Ended September 30, 2012
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	9,383,989		$	575,976		$	-	$	9,959,965
	Cost of revenues (exclusive of
	depreciation and amortization)		8,821,004			343,243			-		9,164,247
	Gross profit		562,985			232,733			-		795,718
	Depreciation and amortization		82,618			11,808			-		94,426
	Selling, general and administrative expenses		1,265,538			950,213			-		2,215,751
	Interest expense		28,430			28,431					56,861
	Other expenses (income)		66,002			(2,426	)		-		63,576
	Net loss	$	(879,603	)	$	(755,293	)	$	-	$	(1,634,896	)
	Total assets	$	1,773,957		$	1,340,857		$	4,248,833	$	7,363,647
	Nine Months Ended September 30, 2013
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	22,458,404		$	22,752,023		$	-	$	45,210,427
	Cost of revenues (exclusive of
	depreciation and amortization)		20,088,181			11,222,683			-		31,310,864
	Gross profit		2,370,223			11,529,340			-		13,899,563
	Depreciation and amortization		222,742			2,411,370			-		2,634,112
	Selling, general and administrative expenses		5,330,703			7,683,251			-		13,013,954
	Interest expense		263,045			1,729,894					1,992,939
	Other (income) expenses		774,767			470,062			-		1,244,829
	Gain on extinguishment of accounts payable		2,883,660								2,883,660
	Net income (loss)	$	(1,337,374	)	$	(765,237	)	$	-	$	(2,102,611	)
	Capital expenditures	$	142,937		$	683,306		$	17,497	$	843,740
	Nine Months Ended September 30, 2012
		Carrier Services			Business Services			Corporate and Unallocated		Consolidated
	Revenues	$	29,965,082		$	1,749,023		$	-	$	31,714,105
	Cost of revenues (exclusive of
	depreciation and amortization)		27,083,520			1,089,276			-		28,172,796
	Gross profit		2,881,562			659,747			-		3,541,309
	Depreciation and amortization		252,677			33,926			-		286,603
	Selling, general and administrative expenses		3,747,117			2,778,160			-		6,525,277
	Interest expense		80,238			80,239					160,477
	Other expenses (income)		234,715			(10,296	)		-		224,419
	Net loss	$	(1,433,185	)	$	(2,222,282	)	$	-	$	(3,655,467	)
	Capital expenditures	$	75,220		$	2,073		$	4,271	$	81,564

13_Other_Income_and_Expenses_T

13. Other Income and Expenses (Tables)	9 Months Ended
	Sep. 30, 2013
Notes to Financial Statements	'
Other expenses (income)	'
	Other (expenses) income for the three and nine months ended September 30, 2013 and 2012 consists of the following:
		Three Months ended September 30,						Nine Months ended September 30,
		2013			2012			2013			2012
	Loss on sale of accounts receivable	$	(47,093	)	$	(66,230	)	$	(175,862	)	$	(235,044	)
	Change in fair value of derivative liability		(838,142	)		-			(732,875	)		-
	Loss on disposal of property and equipment		(2,374	)		-			(2,374	)
	Other		42,438			2,654			108,856			10,625
	Total other income (expenses)	$	(845,171	)	$	(63,576	)	$	(802,255	)	$	(224,419	)

15_Supplemental_Disclosure_of_1

15. Supplemental Disclosure of Cash Flow Information (Tables)	9 Months Ended
	Sep. 30, 2013
Supplemental Disclosure Of Cash Flow Information Tables	'
Supplemental Disclosure of Cash Flow Information	'
		Nine months ended September 30,
		2013		2012
	Cash paid for interest	$	1,395,799	$	32,074
	Supplemental schedule of non-cash financing activities:
	Conversion of notes and interest payable - related parties to common stock	$	895,000	$	125,000
	Conversion of accounts payable - related parties to common stock	$	126,858	$	35,000
	Assets acquired under capital leases	$	359,675	$	-

17_Fair_Value_Disclosures_Tabl

17. Fair Value Disclosures (Tables)	9 Months Ended
	Sep. 30, 2013
Fair Value Disclosures Tables	'
Fair value of the liability measured at fair value on a recurring basis	'
	The following table represents the fair value of the liability measured at fair value on a recurring basis:
		Level 1		Level 2		Level 3		Total
	As of September 30, 2013
	Non-current liabilities:
	Derivative liability (see note 7)	$	-	$	1,798,875	$	-	$	1,798,875
	As of December 31, 2012
	Non-current liabilities:
	Derivative liability	$	-	$	1,066,000	$	-	$	1,066,000

1_Basis_of_Presentation_Consol3

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details)	Sep. 30, 2013	Sep. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	139,828,345	65,090,482
Warrant	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	114,495,924	51,372,711
Stock Options	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	17,662,583	6,418,261
Convertible Preferred	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	7,669,838	7,299,510

1_Basis_of_Presentation_Consol4

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details1) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Basis Of Presentation Consolidation And Summary Of Selected Significant Accounting Policies Details1	'	'	'	'
Total	$51,000	$32,000	$107,000	$101,000

1_Basis_of_Presentation_Consol5

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details2) (USD $)	9 Months Ended
	Sep. 30, 2013
Summarizes the stock option activity	'
Outstanding Beginning Balance, Number of Options	8,864,261
Granted, Number of Options	9,043,610
Forfeitures, Number of Options	-152,625
Expirations in 2013, Number of Options	-92,663
Outstanding at September 30, 2013, Number of Options	17,662,583
Exercisable Ending Balance, Number of Options	5,295,100
Outstanding Beginning Balance, Weighted Average Exercise Price	$0.58
Granted, Weighted Average Exercise Price	$0.08
Forfeitures, Weighted Average Exercise Price	$0.11
Expirations in 2013, Weighted Average Exercise Price	$1.03
Outstanding at September 30, 2013, Weighted Average Exercise Price	$0.33
Exercisable Ending Balance, Weighted Average Exercise Price	$0.89

1_Basis_of_Presentation_Consol6

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Deatils3)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Black-Scholes option-pricing model method with the following assumptions	'	'
Dividend yield	0.00%	0.00%
Stock volatility	137.20%	'
Average Risk-free interest rate	0.68%	'
Average option term (years)	'3 years	'4 years
Minimum	'	'
Black-Scholes option-pricing model method with the following assumptions	'	'
Stock volatility	'	111.20%
Average Risk-free interest rate	'	0.25%
Maximum	'	'
Black-Scholes option-pricing model method with the following assumptions	'	'
Stock volatility	'	148.70%
Average Risk-free interest rate	'	0.28%

1_Basis_of_Presentation_Consol7

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Notes to Financial Statements	'	'	'	'	'
Provision for preferred stock dividends	$101,000	$101,000	$301,000	$302,000	'
Preferred stock dividends	'	'	3,428,000	'	'
Loss on sale of accounts receivable	47,000	235,000	176,000	66,000	'
Outstanding accounts receivable sold	900,000	'	900,000	'	2,400,000
Goodwill	2,603,525	'	2,603,525	'	2,406,269
Stock-based compensation expense	51,000	32,000	107,000	101,000	'
Total unrecognized compensation cost	631,000	'	631,000	'	'
Weighted-average period for Stock Incentive Plans	'	'	'2 years 6 months 26 days	'	'
Advertising and marketing expenses	9,000	0	25,000	8,000	'
Cash restricted held in reserve	232,325	'	232,325	'	1,000,000
Certificate of deposit collateralizing a letter of credit	$163,711	'	$163,711	'	$26,326

2_Going_Concern_Details_Narrat

2. Going Concern (Details Narrative) (USD $)	9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2013
Notes to Financial Statements	'
Working capital deficit	$3.60
Accumulated deficit	156.8
Amount raised from sale of securities	$3.60

3_Acquisition_Details_Narrativ

3. Acquisition (Details Narrative) (USD $)	3 Months Ended	9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2012	Sep. 30, 2012
Acquisition Details Narrative	'	'
Consolidated revenues	$16.70	$52.10
Net loss	$1.40	$2.80

4_Prepaid_Expenses_and_Other_C2

4. Prepaid Expenses and Other Current Assets (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Prepaid expenses and other current assets	'	'
Prepaid insurance	$79,525	$44,390
Due from purchaser of accounts receivable	236,959	648,428
Other prepaid expenses	242,572	308,631
Total	$559,056	$1,001,449

5_Intangible_Assets_Details

5. Intangible Assets (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Gross Carrying Amount	$402,142	$402,142
Accumulated Amortization	-402,142	-402,142
Total	'	'
Trademarks and tradename	'	'
Gross Carrying Amount	563,000	563,000
Accumulated Amortization	-51,608	-9,383
Total	511,392	553,617
Proprietary technology	'	'
Gross Carrying Amount	1,903,000	1,903,000
Accumulated Amortization	-348,883	-63,433
Total	1,554,117	1,839,567
Non-compete agreement	'	'
Gross Carrying Amount	3,257,000	3,257,000
Accumulated Amortization	-995,194	-180,944
Total	2,261,806	3,076,056
Customer contracts	'	'
Gross Carrying Amount	9,824,000	9,824,000
Accumulated Amortization	-593,205	-107,856
Total	9,230,795	9,716,144
Favorable lease intangible	'	'
Gross Carrying Amount	218,000	218,000
Accumulated Amortization	-39,967	-7,267
Total	178,033	210,733
Total acquired intangibles	'	'
Gross Carrying Amount	15,765,000	15,765,000
Accumulated Amortization	-2,028,857	-368,883
Total	13,736,143	15,396,117
Trademarks	'	'
Gross Carrying Amount	315,745	315,745
Accumulated Amortization	-315,745	-315,745
Total	'	'
Intellectual Property	'	'
Gross Carrying Amount	86,397	86,397
Accumulated Amortization	-86,397	-86,397
Total	'	'

5_Intangible_Assets_Details_1

5. Intangible Assets (Details 1) (USD $)	Sep. 30, 2013
Notes to Financial Statements	'
Year ending December 31: 2013	$553,325
2014	2,212,482
2015	2,031,538
2016	1,126,816
2017	$1,056,116

5_Intangible_Assets_Details_Na

5. Intangible Assets (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Notes to Financial Statements	'	'	'	'
Amortization expense	$553,325	$29,052	$1,659,974	$87,156

6_Accounts_Payable_and_Accrued2

6. Accounts Payable and Accrued Expenses (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Notes to Financial Statements	'	'
Trade accounts payable	$5,739,625	$8,800,525
Accrued expenses	594,024	993,618
Accrued payroll and vacation	79,688	113,860
Interest payable	355,244	93,458
Deferred revenue	13,536	21,947
Other	856,309	556,088
Total accounts payable and accrued expenses	$7,638,426	$10,579,496

7_Notes_Payable_NonRelated_Par2

7. Notes Payable - Non-Related Parties (Details) (NonRelatedParty, USD $)	Sep. 30, 2013	Dec. 31, 2012
NonRelatedParty	'	'
Senior Notes	$16,447,917	$16,500,000
Discount on senior notes	-1,577,661	-1,815,920
Total notes payable - non-related parties	14,870,256	14,684,080
Current portion of Senior Notes	-625,000	-208,333
Non-current portion notes payable - non-related parties	$14,245,256	$14,475,747

7_Notes_Payable_Non_Related_Pa

7. Notes Payable - Non Related Parties (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Notes to Financial Statements	'	'
Accreted Discount on senior notes	$1,577,661	$1,815,920
Fair value derivative liability	1,798,875	1,066,000
Recognized loss on change of fair value	732,875	'
Outstanding Advance accounts receivable	$212,500	'

8_Notes_Payable_Related_Party_

8. Notes Payable - Related Party (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Notes Payable - Related Parties	$3,478,081	$4,492,136
RelatedParty	'	'
NBS Sellers Notes	214,286	600,000
Notes payable to Marvin Rosen	3,578,071	4,406,422
Other notes payable - related parties	125,000	125,000
Total notes payable - related parties	3,917,357	5,131,422
Current portion of NBS Sellers Notes	-214,286	-514,286
Current portion of notes payable to Marvin Rosen	-100,000	'
Current portion of notes payable	-125,000	-125,000
Notes Payable - Related Parties	$3,478,071	$4,492,136

12_Segment_Information_Details

12. Segment Information (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Segment Reporting Information [Line Items]	'	'	'	'	'
Revenues	$14,811,828	$9,959,965	$45,210,427	$31,714,105	'
Cost of revenues (exclusive of depreciation and amortization)	9,953,734	9,164,247	31,310,864	28,172,796	'
Gross profit	4,858,094	795,718	13,899,563	3,541,309	'
Depreciation and amortization	911,613	94,426	2,634,112	286,603	'
Selling, general and administrative expenses	4,312,508	2,215,751	13,013,954	6,525,277	'
Interest expense	-663,689	-56,861	-1,992,939	-160,477	'
(Loss) gain on extinguishment of accounts payable	-25,222	'	2,883,660	'	'
Total assets	26,678,957	'	26,678,957	'	27,068,427
Carrier Services	'	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'	'
Revenues	7,026,589	9,383,989	22,458,404	29,965,082	'
Cost of revenues (exclusive of depreciation and amortization)	6,167,706	8,821,004	20,088,181	27,083,520	'
Gross profit	858,883	562,985	2,370,223	2,881,562	'
Depreciation and amortization	83,665	82,618	222,742	252,677	'
Selling, general and administrative expenses	1,667,067	1,265,538	5,330,703	3,747,117	'
Interest expense	82,617	28,430	263,045	80,238	'
Other (income) expenses	1,153,973	'	774,767	234,715	'
(Loss) gain on extinguishment of accounts payable	-25,222	66,002	2,883,660	'	'
Net income (loss)	-2,153,661	-879,603	-1,337,374	-1,433,185	'
Capital expenditures	142,937	75,220	142,937	75,220	'
Total assets	2,862,749	1,773,957	2,862,749	1,773,957	'
Business Services And Other	'	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'	'
Revenues	7,785,239	575,976	22,752,023	1,749,023	'
Cost of revenues (exclusive of depreciation and amortization)	3,786,028	343,243	11,222,683	1,089,276	'
Gross profit	3,999,211	232,733	11,529,340	659,747	'
Depreciation and amortization	827,948	11,808	2,411,370	33,926	'
Selling, general and administrative expenses	2,645,441	950,213	7,683,251	2,778,160	'
Interest expense	581,072	28,431	1,729,894	80,239	'
Other (income) expenses	-16,807	'	470,062	-10,296	'
(Loss) gain on extinguishment of accounts payable	'	'	'	'	'
Net income (loss)	-38,443	-755,293	-765,237	-2,222,282	'
Capital expenditures	683,306	2,073	683,306	2,073	'
Total assets	22,918,730	1,340,857	22,918,730	1,340,857	'
Corporate and Unallocated	'	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'	'
Revenues	'	'	'	'	'
Cost of revenues (exclusive of depreciation and amortization)	'	'	'	'	'
Gross profit	'	'	'	'	'
Depreciation and amortization	'	'	'	'	'
Selling, general and administrative expenses	'	'	'	'	'
Other (income) expenses	'	'	'	'	'
(Loss) gain on extinguishment of accounts payable	'	'	'	'	'
Net income (loss)	'	'	'	'	'
Capital expenditures	17,497	4,271	17,497	4,271	'
Total assets	897,478	4,248,833	897,478	4,248,833	'
Consolidated	'	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'	'
Revenues	14,811,828	9,959,965	45,210,427	31,714,105	'
Cost of revenues (exclusive of depreciation and amortization)	9,953,734	9,164,247	31,310,864	28,172,796	'
Gross profit	4,858,094	795,718	13,899,563	3,541,309	'
Depreciation and amortization	911,613	94,426	2,634,112	286,603	'
Selling, general and administrative expenses	4,312,508	2,215,751	13,013,954	6,525,277	'
Interest expense	663,689	56,861	1,992,939	160,477	'
Other (income) expenses	1,137,166	'	1,244,829	224,419	'
(Loss) gain on extinguishment of accounts payable	-25,222	'	2,883,660	'	'
Net income (loss)	-2,192,104	-1,634,896	-2,102,611	-3,655,467	'
Capital expenditures	843,740	81,564	843,740	81,564	'
Total assets	$26,678,957	$7,363,647	$26,678,957	$7,363,647	'

13_Other_Income_and_Expenses_D

13. Other Income and Expenses (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Notes to Financial Statements	'	'	'	'
Loss on sale of accounts receivable	($47,093)	($66,230)	($175,862)	($235,044)
Change in fair value of derivative liability	-838,142	'	-732,875	'
Loss on disposal of property and equipment	-2,374	'	-2,374	'
Other	42,438	2,654	108,856	10,625
Total other (expenses) income	($845,171)	($63,576)	($802,255)	($224,419)

16_Related_Party_Transactions_

16. Related Party Transactions (Details Narrative) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Notes to Financial Statements	'	'
Related party payable	$668,000	$1,159,000

15_Supplemental_Disclosure_of_2

15. Supplemental Disclosure of Cash Flow Information (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Supplemental Disclosure Of Cash Flow Information Details	'	'
Cash paid for interest	$1,395,799	$32,074
Supplemental schedule of non-cash financing activities:	'	'
Conversion of notes and interest payable - related parties to common stock	895,000	125,000
Conversion of accounts payable - related parties to common stock	126,858	35,000
Assets acquired under capital leases	$359,675	'

17_Fair_Value_Disclosures_Deta

17. Fair Value Disclosures (Details) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Non-current liabilities:	'	'
Derivative liability	$1,798,875	$1,066,000
Level 1	'	'
Non-current liabilities:	'	'
Derivative liability	'	'
Level 2	'	'
Non-current liabilities:	'	'
Derivative liability	1,798,875	1,066,000
Level 3	'	'
Non-current liabilities:	'	'
Derivative liability	'	'