Fusion Connect (FSNN) 10-K 31 Mar 14 2013 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Mar. 25, 2014	Jun. 30, 2013
Document And Entity Information	'	'	'
Entity Registrant Name	'FUSION TELECOMMUNICATIONS INTERNATIONAL INC	'	'
Entity Central Index Key	'0001071411	'	'
Document Type	'10-K	'	'
Document Period End Date	31-Dec-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	'	304,046,486	'
Entity Public Float	'	'	$10,800,586
Document Fiscal Period Focus	'FY	'	'
Document Fiscal Year Focus	'2013	'	'

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Dec. 31, 2013	Dec. 31, 2012
Current assets:	'	'
Cash and cash equivalents	$6,176,575	$543,214
Accounts receivable, net of allowance for doubtful accounts of approximately $381,000 and $514,000, respectively	5,828,389	2,924,302
Prepaid expenses and other current assets	2,704,787	1,001,449
Total current assets	14,709,751	4,468,965
Property and equipment, net	11,193,355	2,748,062
Other assets:	'	'
Security deposits	585,083	439,741
Restricted cash	1,163,872	1,026,326
Goodwill	5,124,130	2,406,269
Intangible assets, net	35,048,818	15,396,117
Other assets	1,125,652	582,947
Total other assets	43,047,555	19,851,400
TOTAL ASSETS	68,950,661	27,068,427
Current liabilities:	'	'
Notes payable - non-related parties	625,000	208,333
Notes payable - related parties	310,714	639,286
Equipment financing obligations	245,138	136,392
Escrow payable	295,000	'
Accounts payable and accrued expenses	11,161,550	10,579,496
Related party payable	226,148	1,159,573
Current liabilities from discontinued operations	55,000	55,000
Total current liabilities	12,918,550	12,778,080
Long-term liabilities:	'	'
Notes payable - non-related parties, net of discount	36,788,987	14,475,747
Notes payable - related parties	1,478,081	4,492,136
Equipment financing obligations	167,614	102,071
Derivative liability	10,515,472	1,066,000
Other long-term liabilities	131,627	266,132
Total liabilities	62,000,331	33,180,166
Commitments and contingencies	'	'
Stockholders' equity (deficit):	'	'
Preferred stock, $0.01 par value, 10,000,000 shares authorized, 23,525 and 11,907 shares issued and outstanding	235	119
Common stock, $0.01 par value, 550,000,000 shares authorized, 303,833,242 and 178,250,533 shares issued and outstanding	3,038,331	1,782,504
Capital in excess of par value	163,648,034	146,760,005
Accumulated deficit	-159,736,270	-154,654,367
Total stockholders' equity (deficit)	6,950,330	-6,111,739
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$68,950,661	$27,068,427

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Current assets:	'	'
Allowance for doubtful accounts	$381,000	$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	23,525	11,907
Preferred Stock, Shares Outstanding	23,525	11,907
Common Stock, Par Value	$0.01	$0.01
Common Stock, Shares Authorized	550,000,000	550,000,000
Common Stock, Shares Issued	303,833,242	178,250,533
Common Stock, Shares Outstanding	303,833,242	178,250,533

Consolidated_Statements_Of_Ope

Consolidated Statements Of Operations (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements Of Operations	'	'
Revenue	$61,496,620	$44,287,509
Cost of revenues, exclusive of depreciation and amortization, shown separately below	42,717,176	37,662,371
Gross profit	18,779,444	6,625,138
Depreciation and amortization	3,571,974	998,789
Selling general and administrative expenses (including stock-based compensation of approximately $189,000 and $200,000 for the years ended December 31, 2013 and 2012, respectively	18,756,325	10,438,967
Total operating expenses	22,328,299	11,437,756
Operating loss	-3,548,855	-4,812,618
Other (expenses) income:	'	'
Interest expense	-2,638,249	-623,460
Loss on extinguishment of debt	-1,105,283	-335,315
(Loss) gain on change in fair value of derivative liability	-598,292	799,500
Other expenses, net	-22,997	-276,695
Total other expenses	-4,364,821	-435,970
Gain on extinguishment of accounts payable	2,883,660	'
Loss from continuing operations before taxes	-5,030,016	-5,248,588
Provision for income taxes	51,887	'
Loss from continuing operations	-5,081,903	-5,248,588
Discontinued operations:	'	'
Income from discontinued operations	'	41,345
Net Loss	-5,081,903	-5,207,243
Loss applicable to common stockholders:	'	'
Loss from continuing operations	-5,081,903	-5,248,588
Preferred stock dividends in arrears	-402,497	-403,600
Net loss from continuing operations applicable to common stockholders:	-5,484,400	-5,652,188
Income from discontinued operation	'	41,345
Net loss applicable to common stockholders:	($5,484,400)	($5,610,843)
Basic and diluted loss per common share:	'	'
Loss from continuing operations	($0.02)	($0.03)
Income from discontinued operations	'	'
Loss per common share:	($0.02)	($0.03)
Weighted average common shares outstanding:	'	'
Basic and diluted	225,027,351	166,726,031

Consolidated_Statements_Of_Ope1

Consolidated Statements Of Operations (Parenthetical) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Consolidated Statements Of Operations Parenthetical	'	'
Share Based Compensation	$189,000	$200,000

Consolidated_Statements_of_Cha

Consolidated Statements of Changes in Stockholders' Deficit (USD $)	Preferred Stock	Common Stock	Capital in Excess of Par	Retained Earnings / Accumulated Deficit	Total
Begining Balance, Amount at Dec. 31, 2011	$50	$1,537,113	$137,325,467	($149,447,124)	($10,584,494)
Begining Balance, Shares at Dec. 31, 2011	5,045	153,711,350	'	'	'
Proceeds from the sale of common stock, net of expenses, Shares	'	10,762,718	'	'	'
Proceeds from the sale of common stock, net of expenses, Amount	'	107,627	1,059,612	'	1,167,239
Proceeds from the sale of preferred stock and warrants, net of expenses, Shares	6,028	'	'	'	'
Proceeds from the sale of preferred stock and warrants, net of expenses, Amount	60	'	5,731,535	'	5,731,595
Issuance of common stock for consideration previously received, Shares	'	587,912	'	'	'
Issuance of common stock for consideration previously received, Amount	'	5,879	-5,879	'	'
Issuance of warrants associated with conversion of indebtedness, Amount	'	'	335,315	'	335,315
Conversion of notes payable and accrued expenses into preferred stock and warrants, Shares	834	'	'	'	'
Conversion of notes payable and accrued expenses into preferred stock and warrants, Amount	9	'	833,991	'	834,000
Common stock issued in connection with executive employment agreement, Shares	'	454,545	'	'	'
Common stock issued in connection with executive employment agreement, Amount	'	4,545	45,455	'	50,000
Common stock issued in connection with acquisition of business, Shares	'	11,363,636	'	'	'
Common stock issued in connection with acquisition of business, Amount	'	113,636	1,136,364	'	1,250,000
Issuance of warrants for services rendered, Amount	'	'	'	61,920	61,920
Conversion of notes payable and accrued interest into common stock and warrants, Shares	'	1,370,372	'	'	'
Conversion of notes payable and accrued interest into common stock and warrants, Amount	'	13,704	146,296	'	160,000
Net loss	'	'	'	-5,207,243	-5,207,243
Stock based compensation associated with stock incentive plans	'	'	89,929	'	89,929
Ending Balance, Amount at Dec. 31, 2012	119	1,782,504	146,760,005	-154,654,367	-6,111,739
Ending Balance, Shares at Dec. 31, 2012	11,907	178,250,533	'	'	'
Conversion of notes payable and accrued expenses into common stock and warrants, Shares	'	11,697,974	'	'	'
Conversion of notes payable and accrued expenses into common stock and warrants, Amount	'	116,980	886,253	'	1,003,233
Proceeds from the sale of common stock and warrants, Shares	'	50,257,163	'	'	'
Proceeds from the sale of common stock and warrants, Amount	'	502,571	3,600,098	'	4,102,669
Proceeds from the sale of preferred stock and warrants, net of expenses, Shares	16,428	'	'	'	'
Proceeds from the sale of preferred stock and warrants, net of expenses, Amount	164	'	15,559,939	'	15,560,103
Issuance of warrants associated with conversion of indebtedness, Amount	'	'	1,105,283	'	1,105,283
Conversion of notes payable and accrued expenses into preferred stock and warrants, Shares	2,052	'	'	'	'
Conversion of notes payable and accrued expenses into preferred stock and warrants, Amount	21	'	2,051,979	'	2,052,000
Net loss	'	'	'	-5,081,903	-5,081,903
Stock based compensation associated with stock incentive plans	'	'	189,484	'	189,484
Issuance of common stock for services rendered, Shares	'	955,564	'	'	'
Issuance of common stock for services rendered, Amount	'	9,556	88,695	'	98,251
Conversion of Series B-1 Preferred Stock into comon stock, Shares	-6,862	62,672,008	'	'	'
Conversion of Series B-1 Preferred Stock into comon stock, Amount	-69	626,720	-626,651	'	'
Warrants issued in conjunction with the issuance of preferred stock deemed not indexed to the Company's common stock	'	'	-5,967,051	'	-5,967,051
Ending Balance, Amount at Dec. 31, 2013	$235	$3,038,331	$163,648,034	($159,736,270)	$6,950,330
Ending Balance, Shares at Dec. 31, 2013	23,525	303,833,242	'	'	'

Condensed_Consolidated_Interim

Condensed Consolidated Interim Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:	'	'
Net loss	($5,081,903)	($5,207,243)
Income from discontinued operations	'	-41,345
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	3,571,974	998,789
Loss on disposal of property and equipment	2,374	7,483
Loss on sale of accounts receivable	226,261	334,931
Bad debt expense	85,405	155,995
Stock-based compensation	296,069	199,754
Amortization of debt discount and deferred financing fees	431,132	66,563
Change in fair value of derivative liability	598,292	-799,500
Loss on extinguishment of debt	1,105,283	335,315
Gain on extinguishment of accounts payable	-2,883,660	'
Increase (decrease) in cash attributable to changes in operating assets and liabilities:	'	'
Accounts receivable	-1,514,262	813,380
Prepaid expenses and other current assets	11,627	11,569
Other assets	18,133	1,902
Accounts payable and accrued expenses	534,098	-103,041
Other long-term liabilities	-134,505	-114,110
Net cash used in operating activities	-2,733,681	-3,339,558
Cash flows from investing activities:	'	'
Purchase of property and equipment	-1,307,349	-398,976
Payment of security deposits	-2,282,370	'
Cash paid for acquisitions, net of cash acquired	-32,108,450	-17,253,648
Change in restricted cash	-519	-1,000,844
Net cash used in investing activities	-35,698,688	-18,653,468
Cash flows from financing activities:	'	'
Proceeds from the sale of common stock and warrants, net	4,102,669	1,167,239
Proceeds from the sale of equity securities not yet issued	295,000	'
Proceeds from notes payable - related parties	100,000	486,000
Proceeds from notes payable - non-related parties	25,712,500	16,800,000
Payments on equipment financing obligations	-99,823	-1,773
Proceeds from the sale of preferred stock and warrants, net of expenses	15,560,103	5,731,595
Payment of deferred financing fees	-669,600	-570,339
Repayments of notes payable - related parties	-514,286	-486,000
Repayments of notes payable - non-related parties	-420,833	-592,039
Net cash provided by financing activities	44,065,730	22,534,683
Net increase in cash and cash equivalents from continuing operations	5,633,361	541,657
Cash flows from discontinued operations:	'	'
Net cash used in operating activities of discontinued operations	'	-1,490
Net change in cash and cash equivalents	5,633,361	540,167
Cash and cash equivalents, beginning of period	543,214	3,047
Cash and cash equivalents, end of period	$6,176,575	$543,214

1_Nature_Of_Operations

1. Nature Of Operations	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
1. Nature Of Operations	'
	Fusion Telecommunications International, Inc. is a Delaware corporation incorporated in September 1997 (“Fusion” and together with its subsidiaries, the “Company”). The Company is a provider of integrated cloud solutions, including cloud voice, cloud connectivity, cloud storage and security to businesses of all sizes, and IP-based voice services to other carriers.  The Company currently operates in two business segments, Business Services and Carrier Services.

2_Summary_Of_Significant_Accou

2. Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Notes to Financial Statements

'

2. Summary Of Significant Accounting Policies

'

Basis of Presentation and Consolidation

The consolidated financial statements include the accounts of Fusion and its wholly owned subsidiaries (see note 3). The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Regulation S-X of the Securities and Exchange Commission (the “SEC”). All inter-company accounts and transactions have been eliminated in consolidation, and certain prior year balances have been reclassified to conform to the current presentation.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of a sale arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed and determinable, and collectability is reasonably assured. The Company records provisions against revenue for billing adjustments, which are based upon estimates derived from factors that include, but are not limited to, historical results, analysis of credits issued and current economic trends. The provisions for revenue adjustments are recorded as a reduction of revenue when incurred.

The Company’s revenue is primarily derived from usage fees charged to other telecommunications carriers that terminate voice traffic over the Company’s network, and from the monthly recurring and usage fees charged to customers that purchase the Company’s business products and services.

Variable revenue is earned based on the length of a call, as measured by the number of minutes of duration. It is recognized upon completion of the call, and is adjusted to reflect the Company’s allowance for billing adjustments. Revenue for each customer is calculated from information received through the Company’s network switches. The Company’s customized software tracks the information from the switches and analyzes the call detail records against stored detailed information about revenue rates. This software provides the Company with the ability to complete a timely and accurate analysis of revenue earned in a period. The Company believes that the nature of this process is such that recorded revenues are unlikely to be revised in future periods.

Fixed revenue is earned from monthly recurring services provided to the customer, for which the charges are contracted for over a specified period of time. Revenue recognition commences after the provisioning, testing and acceptance of the service by the customer. The recurring customer charges continue until the expiration of the contract, or until cancellation of the service by the customer. To the extent that payments received from a customer are related to a future period, the payment is recorded as deferred revenue until the service is provided or the usage occurs.

Cost of Revenues

Cost of revenues for the Company’s Carrier Services business segment is comprised primarily of costs incurred from other domestic and international communications carriers to originate, transport, and terminate voice calls for the Company’s carrier customers. Thus the majority of the Company’s cost of revenues for this business segment is variable, based upon the number of minutes actually used by the Company’s customers and the destinations they are calling. Call activity is tracked and analyzed with customized software that analyzes the traffic flowing through the Company’s network switch. During each period, the call activity is analyzed and an accrual is recorded for the revenues associated with minutes not yet invoiced. This cost accrual is calculated using minutes from the system and the variable cost of revenue based upon predetermined contractual rates. Fixed expenses reflect the costs associated with connectivity between the Company’s network infrastructure, including its New York switching facility, and certain large carrier customers and vendors.

For the Company’s Business Services business segment, fixed expenses include the monthly recurring charges associated with certain platform services purchased from other service providers, the monthly recurring costs associated with private line services and the cost of broadband Internet access used to provide service to business customers.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded net of an allowance for doubtful accounts. On a periodic basis, the Company evaluates accounts receivable and records an allowance for doubtful accounts based on the Company’s history of past write-offs, collections experience and current credit conditions. Specific customer accounts are written off as uncollectible when collection efforts have been exhausted and payments are not expected to be received.

The Company has an agreement to sell certain of its accounts receivable under an arrangement with a third party (see note 4). 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.

Fair Value of Financial Instruments

The carrying amounts of the Company’s assets and liabilities approximate their fair value presented in the accompanying consolidated balance sheets, due to their short maturities.

Intangible Assets

Intangible assets at December 31, 2013 and 2012 pertain to a trade name and trademark, non-compete agreements, proprietary technology, customer contracts and a below-market lease, all of which were acquired in the business combinations described in note 3. In determining fair value, the Company uses standard analytical approaches to business enterprise valuation (“BEV”), such as the income approach and the market comparable approach. The income approach involves estimating the present value of the subject asset’s future cash flows by using projections of the cash flows that the asset is expected to generate, and discounting these cash flows at a given rate of return. The market comparable approach is based on comparisons of the subject company to similar companies engaged in an actual merger or acquisition or to public companies whose stocks are actively traded. Each of these BEV methodologies requires the use of management estimates and assumptions. Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets, which ranges from two to fifteen years.

Goodwill

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired (see note 3). Goodwill at December 31, 2013 and 2012 was $5.1 million and $2.4 million, respectively. Goodwill is not amortized but is instead tested annually for impairment. All of the Company’s goodwill is attributable to its Business Services business segment. The following table presents the change in goodwill during the years ended December 31, 2013 and 2012:

Balance at January 1, 2013

Additions (a)

Other (b)

Balance at December 31, 2013

Balance at January 1, 2012

Additions (a)

Other (b)

Balance at December 31, 2012

$

2,406,269

2,520,605

197,256

$

5,124,130

$

-

2,381,201

25,068

$

2,406,269

(a) - Amount relates to acquisitions.  See note 3.

(b) - Amount relates to adjustments to the preliminary purchase price for 2012 acquisitions.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the carrying value of the asset exceeds the projected undiscounted cash flows, the Company is required to estimate the fair value of the asset and recognize an impairment charge to the extent that the carrying value of the asset exceeds its estimated fair value. The Company did not record any impairment charges for the years ended December 31, 2013 and 2012.

Impairment testing for goodwill is performed annually in the Company’s fourth fiscal quarter. 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 authoritative guidance provides entities with an option to perform a qualitative assessment to determine if the fair value of the entity is less than its carrying value. The Company performed a qualitative impairment evaluation on the on the goodwill acquired on October 29, 2012 (see note 3) and determined that no impairment existed.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows:

Asset

Estimated Useful Lives

Network equipment

5 – 7 Years

Furniture and fixtures

3 – 7 Years

Computer equipment and software

3 – 5 Years

Customer premise equipment

2 – 3 Years

Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the term of the associated lease. Maintenance and repairs are recorded as a period expense, while betterments and improvements are capitalized.

Customer premise equipment primarily consists of switches, routers, handsets and ancillary items for which the Company retains title but are utilized at customer locations. At December 31, 2012, the Company had approximately $341,000 of such equipment which had been reflected as inventory in its consolidated balance sheet. The Company has reclassified this amount to property and equipment to more accurately reflect the nature, use and useful life of these assets.

The Company capitalizes a portion of its payroll and related costs for the development of software for internal use and amortizes these costs over three years. During the years ended December 31, 2013 and 2012, the Company capitalized costs pertaining to the development of internally used software in the approximate amount of $794,000 and $151,000, respectively.

Derivative Financial Instruments

The Company accounts for warrants issued in conjunction with the issuance of debt and equity in accordance with the guidance contained in ASC Topic 815, Derivatives and Hedging (“ASC 815”). For warrant instruments that are not deemed to be indexed to the Company’s own stock, the Company classifies the warrant instrument as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations (see notes 11, 14 and 22). The fair values of the warrants have been estimated using a Black-Scholes valuation model and the Company’s quoted market price.

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 $28,000 and $23,000 for the years ended December 31, 2013 and 2012, respectively.

Income Taxes

The accounting and reporting requirements with respect to income taxes require an asset and liability approach. 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 December 31, 2013 and 2012. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2010 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 December 31, 2013 and 2012. During the years ended December 31, 2013 and 2012, the Company recognized no adjustments for uncertain tax positions.

Earnings (Loss) per Share

Basic loss per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss 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. The following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:

2013

2012

Warrants

200,791,160

89,974,479

Stock options

17,570,760

8,864,261

Convertible preferred stock

192,563,181

70,064,862

410,925,101

168,903,602

The net loss per common share calculation includes a provision for preferred stock dividends in the approximate amount of $402,000 and $404,000 for the years ended December 31, 2013 and 2012, respectively. However, no cash dividend has been declared by the Board of Directors for any of the years presented. The dilutive securities in the year ended December 31, 2013 include preferred stock convertible into 184,800,000 shares of common stock and warrants to purchase 59,136,000 shares of common stock that contain a provision that prohibits their conversion or exercise until the Company files an amendment to its Certificate of Incorporation to increase the number of shares which it is authorized to issue sufficient to permit the preferred stock and warrants to be converted and exercised, respectively (see note 14).

Discontinued Operations

The Company classifies a business component that either has been disposed of or is classified as held for sale as a discontinued operation if the cash flow of the component has been or will be eliminated from ongoing operations and the Company will no longer have any significant continuing involvement in the component. The results of operations of the discontinued component through the date of disposition, including any gains or losses on disposition, are aggregated and presented in the consolidated statement of operations as income (loss) on discontinued operations. See note 9 for additional information regarding discontinued operations.

Stock-Based Compensation

The Company accounts for stock-based compensation by recognizing the fair value of compensation cost for all stock and stock-based awards over the service period (generally equal to the vesting period). Compensation cost is determined using the Black-Scholes option pricing model to estimate the fair value of the awards at the grant date. An offsetting increase to stockholders’ equity is recorded equal to the amount of the compensation expense charge.

Stock-based compensation for the years ended December 31, 2013 and 2012 is comprised of the following:

2013

2012

Expenses associated with stock options granted to employees and directors

$

189,484

89,929

Common stock issued in connection with an employment agreement

-

50,000

Common stock or warrants issued or issuable for services rendered

106,585

59,825

$

296,069

199,754

Stock-based compensation is included in selling, general, and administrative expenses in the consolidated statements of operations and, with respect to stock option expense, 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 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:

2013

2012

Dividend yield

0

%

0

%

Stock volatility

137

%

138

%

Average Risk-free interest rate

0.68

%

1.74

%

Average option term (years)

3

4-Mar

Recently Adopted and Issued Accounting Pronouncements

During the years ended 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 that, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

Use of Estimates

The preparation of consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the year. Actual results could be affected by those estimates.

3_Acquisition

3. Acquisition	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
3. Acquisition	'
	On December 31, 2013, the Company, through its wholly-owned subsidiary Fusion BVX LLC (“FBVX”), completed the acquisition of substantially all of the cloud services assets used by BroadvoxGO!, LLC and its affiliate Cypress Communications, LLC (collectively, “Sellers”) in the operation of their cloud services business.  A definitive agreement to purchase these assets, including the assumption of substantially all of the related on-going liabilities incurred in the ordinary course of business (collectively, the “Broadvox Assets”) was entered into on August 30, 2013, and amended on November 15, 2013 and December 16, 2013 (the “BVX Purchase Agreement”).
	The purchase price of the Broadvox Assets of $32.1 million was paid in cash at closing (less the $1 million deposit previously delivered to the Sellers).  The Company had delivered a deposit of $0.2 million when the BVX Purchase Agreement was initially executed, and delivered additional deposits of $0.1 million and $0.7 million when the agreement was amended on November 15, 2013 and December 16, 2013, respectively.  In accordance with the terms of the BVX Purchase Agreement, the purchase price remains subject to adjustment based on certain working capital measurements described in the BVX Purchase Agreement that the Company expects will be finalized in the second quarter of 2014.  In addition, $3.21 million of the Purchase Price is being held in escrow for a period of up to one year as collateral to secure the accuracy of the Sellers’ representations, warranties and covenants contained in the BVX Purchase Agreement.
	In accordance with the BVX Purchase Agreement, the Company and the Sellers entered into a Transitional Services Agreement governing the provision and receipt of certain services between the Company and the Sellers covering a range of topics including the Company's purchase of VOIP and wholesale services from the Sellers; the Company's utilization of the Sellers' network infrastructure; the Company’s temporary use of financial and administrative systems owned by the Sellers; the marketing of services offered by the Company by sales representatives of the Sellers; and the Company’s use of certain of Sellers’ office facilities and employees.   The aggregate purchase price has initially been allocated to the fair value of the net assets acquired as follows:
	Accounts receivable	$	1,486,552
	Other current assets		127,161
	Property and equipment		8,139,318
	Intangible assets subject to amortization		21,866,000
	Goodwill		2,520,605
	Current liabilities		(2,031,186	)
		$	32,108,450
	The final allocation of the purchase price is subject to modification based upon a final determination and mutual agreement of the Company and Sellers with respect to the aforementioned working capital measurements.  The Company’s consolidated balance sheet as of December 31, 2013 includes the Broadvox Assets, and the results of operations generated by the Broadvox Assets will be reflected in the Company’s consolidated statement of operations effective January 1, 2014.
	On October 29, 2012, the Company, through its wholly-owned subsidiary, Fusion NBS Acquisition Corp. (“FNAC”), completed the acquisition of all of the issued and outstanding membership interests of Network Billing Systems, LLC and substantially all of the assets of its affiliate, Interconnect Services Group II LLC (“ISG”), and thereby acquired the business operated by NBS and ISG (collectively, “NBS”).  Definitive agreements to purchase NBS had been entered into on January 30, 2012, and were amended on June 6, 2012, August 20, 2012, September 21, 2012 and October 24, 2012 (the “Purchase Agreements”).
	NBS is a cloud services provider offering a wide range of hosted voice and data services, Internet and data network solutions to small, medium and large businesses in the United States.  In accordance with the terms of the Purchase Agreements, the Company’s purchase of NBS included approximately $496,000 of cash and the assumption of certain related liabilities.  The aggregate purchase price for the outstanding membership interests of NBS and the assets of ISG, net of the assumed liabilities, was $19.6 million, consisting of $17.75 million in cash, $0.6 million to be evidenced by promissory notes payable to the sellers of the NBS membership interests (the “Seller Notes”) and 11,363,636 shares of restricted common stock of Fusion valued at $1.25 million.  The purchase price was adjusted for an additional amount payable to the sellers following the application of certain working capital measurements described in the Purchase Agreements, the initial determination of which was $1,129,000.  The Seller Notes bear interest at the rate of 3% per annum and are payable in 14 equal monthly installments commencing January 31, 2013, and 10% of the cash portion of the Purchase Price was held in escrow for a period of up to one year as collateral to secure the accuracy of the sellers’ representations, warranties and covenants contained in the Purchase Agreements.  The escrow amount has since been released to the Sellers.  The Seller Notes, which were paid in their entirety subsequent to December 31, 2013, were payable to Jonathan Kaufman, the founder and principal operating officer of NBS, and his designees.  Payment of the Seller Notes was subordinated to payment of certain senior secured debt (see note 11).  The aggregate purchase price was allocated to the fair value of the net assets acquired as follows:
	Cash	$	496,352
	Accounts receivable		2,215,172
	Inventory		320,034
	Other current assets		214,463
	Property and equipment		1,463,322
	Other assets		2,600
	Intangible assets subject to amortization		15,765,000
	Goodwill		2,381,301
	Current liabilities, including $1,129,000 related to a working capital adjustment		(3,258,244	)
		$	19,600,000
	The Company recognized goodwill of approximately $2,381,000 in connection with the acquisition of NBS.  Subsequent to the acquisition, in December 2012, the working capital payment due to the sellers was adjusted by approximately $25,000 resulting in a corresponding increase in goodwill.  This working capital payment is reflected as a Related party payable on the Company’s consolidated balance sheets of approximately $226,000 and $1,160,000 as of December 31, 2013 and 2012, respectively.
	The Company’s consolidated financial statements include the assets, liabilities and results of operations of NBS effective as of the October 29, 2012 acquisition date. The Company’s statement of operations for the year ended December 31, 2012 includes revenues of approximately $4.5 million and net loss of approximately $73,000 related to NBS.
	The following table provides certain pro forma financial information for the Company as if the acquisition of NBS and the Broadvox Assets had both been consummated effective as of January 1, 2012:
	($000’s)	For the year ended December 31,
		2013			2012
	Revenues	$	94,148		$	97,098
	Net loss	$	(12,490	)	$	(20,253	)
	Concurrently with the acquisition of NBS, the Company entered into an Employment and Restrictive Covenant Agreement with Mr. Kaufman, under which Mr. Kaufman became the President of the Company’s combined Business Services business segment.
	The acquisitions of the Broadvox Assets and NBS added approximately 10,000 customer locations to the Company’s Business Services segment, and are part of the Company’s strategy to increase the percentage of the Company’s total revenues contributed by the Business Services business segment, which generally operates at higher profit margins than does the Company’s Carrier Services business segment.

4_Sale_Of_Accounts_Receivable

4. Sale Of Accounts Receivable	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
4. Sale Of Accounts Receivable	'
	On September 12, 2011 the Company entered into a purchase and sale agreement with Prestige Capital Corporation (“Prestige”), whereby the Company sells certain of its accounts receivable to Prestige at a discount in order to improve the Company’s liquidity and cash flow. Under the terms of the purchase and sale agreement, Prestige pays the Company a percentage of the face amount of the receivables at the time of sale with the remainder, net of the discount, paid to the Company within two business days after Prestige receives payment on the receivables, which generally have 30 day terms. Outstanding accounts receivable sold to Prestige at December 31, 2013 and 2012 amounted to approximately $0.9 million and $2.4 million, respectively, and the Company recognized a loss on the sale of accounts receivable for the years ended December 31, 2013 and 2012 of approximately $226,000 and $335,000 respectively, in connection with the sale of accounts receivable. The transfer of accounts receivable to Prestige under this agreement meets the criteria for a sale of financial assets. As a result, such receivables have been derecognized from the Company’s consolidated balance sheet as of December 31, 2013 and 2012.
	From time to time the Company has also received short term advances from Prestige (see note 11) which are secured by a priority lien on the Company’s accounts receivable; however such advances are not attributable to a transfer of specific accounts receivable and are therefore reflected as notes payable to non-related parties in the accompanying consolidated balance sheets. Prestige and the Company’s Senior Lenders are parties to an Intercreditor Agreement that, as amended, allocates security interests in the Company’s assets among Prestige and the Senior Lenders (see Note 11).

5_Intangible_Assets

5. Intangible Assets	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
5. Intangible Assets	'
	Identifiable intangible assets as of December 31, 2013 and 2012 are comprised of:
		31-Dec-13							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	$	(65,683	)	$	497,317	$	563,000	$	(9,383	)	$	553,617
	Proprietary technology		1,903,000		(444,033	)		1,458,967		1,903,000		(63,433	)		1,839,567
	Non-compete agreement		3,257,000		(1,266,611	)		1,990,389		3,257,000		(180,944	)		3,076,056
	Customer relationships		9,824,000		(754,988	)		9,069,012		9,824,000		(107,856	)		9,716,144
	Favorable lease intangible		218,000		(50,867	)		167,133		218,000		(7,267	)		210,733
	Total acquired intangibles		15,765,000		(2,582,182	)		13,182,818		15,765,000		(368,883	)		15,396,117
	Intangibles associated with the acquisition of the Broadvox Assets:
	Proprietary technology		3,878,000		-			3,878,000		-		-			-
	Non-compete agreements		5,471,000		-			5,471,000		-		-			-
	Customer relationships		12,517,000		-			12,517,000		-		-			-
	Total acquired intangibles		21,866,000		-			21,866,000		-		-			-
	Other intangibles:
	Trademarks		-		-			-		315,745		(315,745	)		-
	Intellectual property		-		-			-		86,397		(86,397	)		-
	Total	$	37,631,000	$	(2,582,182	)	$	35,048,818	$	16,167,142	$	(771,025	)	$	15,396,117
	During the year ended December 31, 2013, the Company retired the intangible assets not related to the Broadvox Assets and NBS. These assets became fully amortized at December 31, 2012 due to a change in the estimated useful life of the assets. Aggregate amortization expense for each of the five years subsequent to December 31, 2013 is expected to be as follows:
	For the year ended December 31,
	2014	$	6,686,429
	2015		6,505,484
	2016		2,865,262
	2017		2,794,562
	2018		2,441,062

6_Prepaid_Expenses_and_Other_C

6. Prepaid Expenses and Other Current Assets	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
6. Prepaid Expenses and Other Current Assets	'
	Prepaid expenses and other current assets consist of the following at December 31, 2013 and December 31, 2012:
		2013		2012
	Prepaid insurance	$	63,737	$	44,390
	Other prepaid expenses		404,818		308,631
	Escrowed funds – senior lenders		2,000,000		-
	Due from Prestige (see note 4)		236,232		648,428
	Total	$	2,704,787	$	1,001,449
	The $2.0 million of escrowed funds pertain to a portion of the funds the Company deposited into an account controlled by the Company’s senior lenders, as more fully described in note 11, pending receipt of certain regulatory approvals for the pledging of assets related to the debt incurred to finance the acquisition of the Broadvox Assets (see note 3). The funds will remain in escrow until such time as the necessary regulatory approvals are obtained. The Company expects to receive all such approvals during the second quarter of 2014, at which time the funds will be returned to the Company, subject to the terms contained in the loan documents governing the Company’s senior debt.

7_Property_And_Equipment

7. Property And Equipment	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
7. Property And Equipment	'
	At December 31, 2013 and 2012, property and equipment is comprised of the following:
		2013			2012
	Network equipment	$	7,675,786		$	3,318,217
	Furniture and fixtures		299,571			334,564
	Computer equipment and software		2,654,428			1,835,491
	Customer premise equipment		5,169,629			341,118
	Vehicles		55,884			55,884
	Leasehold improvements		993,799			949,190
	Assets in progress		-			274,009
	Total		16,849,097			7,108,473
	Less: accumulated depreciation		(5,655,742	)		(4,360,411	)
	Total	$	11,193,355		$	2,748,062
	Depreciation expense was approximately $1,359,000 and $464,000 for the years ended December 31, 2013 and 2012, respectively.

8_Restricted_Cash

8. Restricted Cash	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
8. Restricted Cash	'
	Restricted cash at December 31, 2013 and 2012 includes $1,000,000 of cash held in reserve as required by the terms of the Company’s senior lending agreement (see note 11). Restricted cash also includes certificates of deposit collateralizing letters of credit in the amounts of $163,872 and $26,326 at December 31, 2013 and 2012, respectively. These letters of credit are required as security for certain of the Company’s non-cancelable operating leases for office facilities.

9_Discontinued_Operations

9. Discontinued Operations	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
9. Discontinued Operations	'
	The Company maintains an accrual for outstanding liabilities associated with its consumer services segment, which the Company eliminated in 2009. The estimate of liabilities associated with the consumer segment was $55,000 at December 31, 2013 and 2012. The Company recorded income from discontinued operations of approximately $41,000 in the year ended December 31, 2012, which was primarily attributable to reductions in the accrual for liabilities associated with the discontinued business segment.

10_Accounts_Payable_and_Accrue

10. Accounts Payable and Accrued Expenses	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
10. Accounts Payable and Accrued Expenses	'
	Accounts payable and accrued expenses consist of the following at December 31, 2013 and December 31, 2012:
		31-Dec-13		31-Dec-12
	Trade accounts payable	$	5,933,736	$	8,800,525
	Accrued expenses		3,101,103		993,618
	Accrued payroll and vacation		102,898		113,860
	Interest payable		421,632		93,458
	Deferred revenue		407,426		21,947
	Other		1,194,755		556,088
	Total accounts payable and accrued expenses	$	11,161,550	$	10,579,496

11_Notes_PayableNonRelated_Par

11. Notes Payable-Non-Related Parties	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
11. Notes Payable-Non-Related Parties	'
	At December 31, 2013 and December 31, 2012, notes payable - non-related parties are comprised of the following:
			31-Dec-13			31-Dec-12
	Senior Notes		$	41,791,667		$	16,500,000
	Discount on Senior Notes			(4,377,680	)		(1,815,920	)
	Total notes payable - non-related parties			37,413,987			14,684,080
	Less:
	Current portion of Senior Notes			(625,000	)		(208,333	)
	Non-current portion notes payable - non-related parties		$	36,788,987		$	14,475,747
	Senior Notes
	On October 29, 2012, Fusion and 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”) 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 Series A Notes and Series B Notes were used to finance the acquisition of NBS.
	The Series A Notes and the Series B Notes provide for the payment of interest on a monthly basis. The Series A Notes provided for monthly principal payments in the amount of $52,083 from September 30, 2013 through December 31, 2013, with the remaining outstanding principal balance being due and payable on October 27, 2017. The outstanding principal balance of the Series B Notes was originally due and payable on October 27, 2017. During the year ended December 31, 2013, the Company made principal payments on the Series A Notes in the amount of $208,333.
	In connection with the sale of the Series A Notes and Series B Notes to the Lenders, the Company issued a nominal warrant to the Lenders to purchase 13,325,000 shares of the Company’s common stock (the “Original Lenders’ Warrant”). The Original Lenders’ Warrant is exercisable from the date of issuance until October 29, 2022, at an exercise price of $.01 per share. The Company is required to pay the exercise price on behalf of the Lenders at the time of exercise. Commencing upon the earlier of a change in control, the repayment of the Series A Notes and Series B Notes in full or October 29, 2017, in the event that the Company’s common stock does not meet certain liquidity thresholds with respect to trading volume and market price, then the Lenders have the right to require the Company to repurchase the shares issued or issuable upon exercise of the Original Lenders’ Warrant at a repurchase price based upon the formulas set forth therein.
	The Company recorded a discount on the Series A Notes and Series B Notes based on the fair value of the Original Lenders’ Warrant as of the date of issuance, which was $1,865,500. The discount is being accreted over the life of the Series A Notes and the Series B Notes, and this discount was $1,493,552 and $1,815,920 as of December 31, 2013 and December 31, 2012, respectively. In addition, the Original Lenders’ Warrant does not meet the criteria for equity classification under ASC Topic 480, Distinguishing Liabilities From Equity (“ASC 480”), and is not considered to be indexed to the Company’s own stock under the guidance provided in ASC 815. As a result, the Company recognized a derivative liability in the amount of $1,865,500 upon the issuance of the Original Lenders' Warrant. At December 31, 2013 and December 31, 2012, the fair value of the derivative liability related to the Original Lenders’ Warrant was $1,664,292 and $1,066,000, respectively. The Company recognized a loss on the change in fair value of this derivative liability of $598,292 for the year ended December 31, 2013 and a gain on the change in fair value of $799,500 for the year ended December 31, 2012.
	The Company also incurred expenses in the approximate amount of $571,000 in connection with the SPA and sale of the Series A Notes and Series B Notes, including a transaction fee paid to the Lenders of $330,000 and legal expenses of approximately $232,000. These amounts are reflected in Other assets on the Company’s consolidated balance sheet at December 31, 2013 and 2012 and are being amortized as interest expense over the life of the notes.
	In conjunction with the execution of the SPA, the Company and the Lenders also entered into a series of ancillary agreements relating to, among other things, securing the Lenders’ right to repayment of the Series A Notes and Series B Notes and establishing priority as to payments and to security among the Lenders and other creditors of the Company (the “Ancillary Agreements”). The Ancillary Agreements consist of:
		·	An IP Security Agreement under which the Company has pledged intellectual property to the Lenders to secure payment of the Notes;
		·	Intercreditor and Subordination Agreements under which creditors of the Company (including affiliates of the Company) and the Lenders have established priorities among them and reached certain agreements as to enforcing their respective rights against the Company (see note 13);
		·	A Pledge Agreement under which Fusion and its Subsidiaries have each pledged their equity interests in certain subsidiaries to the Lenders;
		·	A Right of First Refusal Agreement granting Fusion certain rights to purchase the shares issued or issuable upon exercise of the Lenders’ Warrants; and
		·	A Management Rights Agreement and SBA Side Letters relating to the Lenders’ status and rights as small business lenders.
	On December 15, 2013, the Company sold to the Lenders Series C senior notes (the “Series C Notes”) in the aggregate principal amount of $0.5 million. The proceeds were used to pay a deposit on the purchase price to the sellers of the Broadvox Assets (see note 3).
	On December 31, 2013, the SPA was amended and restated whereby the Company sold to Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP, Plexus Fund III, L.P., Plexus Fund QP III, L.P. and United Insurance Company of America, (collectively with Plexus Fund II, L.P., the “Senior Lenders”) Series D Senior Notes (the “Series D Notes”) in the aggregate principal amount of $25.0 million (collectively with the Series A Notes, the Series B Notes and the Series C Notes, the “Senior Notes”). The proceeds from the Series D Notes were used to finance the acquisition of the Broadvox Assets. Under the terms of the SPA, as amended:
		·	Plexus Fund III, L.P., Plexus Fund QP III, L.P. and United Insurance Company of America became parties to the SPA and the Ancillary Agreements.
		·	The interest rate on all of the Senior Notes was adjusted to 11.15% per annum.
		·	The maturity date on all of the Senior Notes became December 31, 2018.
		·	Interest on all of the Senior Notes is payable monthly, and monthly principal payments aggregating $52,083 are required from January 2014 through December 2014.
		·	Monthly principal payments aggregating $102,083 are required from January 2015 through December 2018, with the outstanding principal balance on all of the Senior Notes payable at maturity.
	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 $1.0 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. From time to time 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 and November 12, 2013, the Company and the Lenders entered into Waiver and Amendment Agreements to the SPA whereby the Lenders agreed to waive compliance with the $1.0 million minimum cash balance requirement and reduced the minimum cash balance requirement from $1.0 million to $0.5 million for certain periods. Under the Waiver and Amendment Agreements and the amended and restated SPA, the Company is required to maintain a minimum cash bank balance of no less than $1.0 million, in excess of any and all cash balances held by NBS and FBVX, at all times subsequent to December 31, 2013. The Company has been in compliance with the minimum cash bank balance requirement since December 31, 2013.
	The obligations to the Senior Lenders are secured by first priority security interests on all of the assets of FNAC, NBS and FBVX, as well as the capital stock of each of the Company’s subsidiaries, including NBS and FBVX, 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, FBVX and NBS guaranteed FNAC’s obligations under the SPA, including FNAC’s obligation to repay the Senior Notes.
	In connection with the amended and restated SPA with the Senior Lenders and the sale of the Series C Notes and Series D Notes, the Company issued an additional nominal warrant to the Senior Lenders to purchase 23,091,000 shares of the Company’s common stock (the “New Lenders’ Warrant”) on substantially the same terms as the Original Lenders’ Warrant. The New Lenders’ Warrant is exercisable from the date of issuance until December 31, 2023.
	The Company recorded a discount on the Series C Notes and Series D Notes based on the fair value of the New Lenders’ Warrant as of the date of issuance, which was $2,884,128, with the discount to be accreted over the life of the Senior Notes. The New Lenders’ Warrant also does not meet the criteria for equity classification under ASC Topic 480, and is not considered to be indexed to the Company’s own stock under the guidance provided in ASC 815. As a result, the Company recognized a derivative liability in the amount of $2,884,128 upon the issuance of the New Lenders' Warrant.
	The Company also incurred expenses in the approximate amount of $669,000 in connection with the amended SPA and sale of the Series D Notes, including a transaction fee paid to the Lenders of $500,000. These amounts are reflected in Other assets on the Company’s consolidated balance sheet at December 31, 2013 and 2012 and are being amortized as interest expense over the life of the Senior Notes.
	Other notes payable
	During the year ended December 31, 2013, the Company received advances from Prestige (see note 4) 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 year, 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 year ended December 31, 2013.
	On September 19, 2011, the Company received an advance of $208,000 from Prestige. At December 31, 2011, the outstanding balance on this advance was $103,073, which was paid in full during the year ended December 31, 2012. Also during the year-ended December 31, 2012, the Company repaid approximately $189,000 to the issuer of a letter of credit for the unsecured portion of the letter of credit that had been drawn down in 2011.

12_Equipment_Financing_Obligat

12. Equipment Financing Obligations	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
12. Equipment Financing Obligations	'
	From time to time during the years ended December 31, 2013 and 2012 the Company entered into several equipment financing or capital lease arrangements to finance the purchase of network hardware and software utilized in the Company’s operations. These arrangements require monthly payments over a period of 24 to 36 months with interest rates ranging between 4% and 11%. The balance on the Company’s equipment financing obligations aggregated to $0.4 million and $0.2 million and December 31, 2013 and 2012, respectively.

13_Notes_PayableRelated_Partie

13. Notes Payable-Related Parties	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
13. Notes Payable-Related Parties	'
	At December 31, 2013 and 2012, components of notes payable – related parties are comprised of the following:
		31-Dec-13			31-Dec-12
	NBS Sellers Notes	$	85,714		$	600,000
	Notes payable to Marvin Rosen		1,578,081			4,406,422
	Other notes payable - related parties		125,000			125,000
	Total notes payable - related parties		1,788,795			5,131,422
	Less:
	Current portion of NBS Sellers Notes		(85,714	)		(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	$	1,478,081		$	4,492,136
	Sellers Notes
	As part of the purchase price of NBS, FNAC issued the Sellers Notes in the principal amount of $600,000 (see note 4). The Sellers Notes pay interest at 3% per annum. The Sellers Notes are payable in fourteen equal monthly installments commencing January 31, 2013 and are unsecured. During the year ended December 31, 2013, the Company made principal payments on the Sellers Notes aggregating to $514,286. Except for permitted payments, payment of the Sellers Notes has been subordinated to payment of the Senior Notes (see note 11), and the Senior Notes were paid in full subsequent to December 31, 2013.
	Notes Payable to Marvin Rosen
	During the year ended December 31, 2012, the Company received $236,000 of new loans from Marvin Rosen, the Company’s Chairman of the Board of Directors, all of which were repaid during the year. During the first nine months of 2012, Mr. Rosen converted $125,000 of previously issued loans evidenced by promissory notes into 925,927 shares of the Company’s common stock and five-year warrants to purchase 277,779 shares of common stock. The warrants are exercisable at approximately 112% of the average closing price of the Company’s common stock for the five trading days prior to the conversion.
	On October 22, 2012, Marvin Rosen converted $724,000 of loans evidenced by promissory notes into 724 shares of the Company’s Series B-1 Cumulative Convertible preferred stock (the “Series B-1 Preferred Stock”, see note 14) and warrants to purchase 2,652,015 shares of the Company’s common stock on the same terms as those investors who participated in the Company’s offering of Series B-1 Preferred Stock. Also on October 22, 2012, Marvin Rosen transferred loans receivable from the Company evidenced by promissory notes in the amount of $26,000 to Matthew Rosen, the Company’s Chief Executive Officer. On that same date, Matthew Rosen converted the $26,000 in promissory notes into 26 shares of Series B-1 Preferred Stock and warrants to purchase shares of the Company’s common stock on the same terms as those who participated in the offering of Series B-1 Preferred Stock.
	In conjunction with the Company’s sale of the Senior Notes to the Lenders, Marvin Rosen entered into an Intercreditor and Subordination agreement with the Company and the Lenders (the “Subordination Agreement”), whereby Mr. Rosen agreed, among other things, that 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 all of 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, on which the Company also agreed to pay Mr. Rosen 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 remained outstanding as of December 31, 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.
	On December 31, 2013, Mr. Rosen converted $2.0 million of the New Rosen Note into 2,000 shares of the Company’s newly designated Series B-2 Cumulative Convertible Preferred Stock (see note 14) and warrants to purchase 6,400,000 shares of the Company’s common stock with an exercise price of $0.125 per share.
	Other Notes Payable – Related Parties
	On May 21, 2009, the Company borrowed $125,000 from Marose, LLC, of which Mr. Rosen is a member. This loan is evidenced by a promissory note, which initially matured on July 20, 2009, and bears an interest rate of 8% per annum. On the July 20, 2009 initial maturity date of the note, the note became a demand note pursuant to its terms, and the entire amount of this note remained outstanding at December 31, 2013 and December 31, 2012. To date the Company has not received a demand for payment.
	On June 22, 2012, the Company received a loan of $300,000, bearing interest at a rate of 3.25% per annum, from a third party lending institution and guaranteed by Marvin Rosen. The outstanding balance of the loan plus all accrued interest was repaid in its entirety on October 22, 2012 (see note 14). The proceeds from the loan were used for general corporate purposes and to pay a portion of outstanding indebtedness to Mr. Rosen. On September 17, 2012 the Company received a new loan from Marvin Rosen and another member of the Company’s Board of Directors in the principal amount of $250,000, the proceeds from which was used for general corporate purposes, and which was repaid on October 22, 2012 (see note 14).

14_Equity_Transactions

14. Equity Transactions	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
14. Equity Transactions	'
	Preferred Stock
	On December 31, 2013, the Company issued to a total of 82 accredited investors (the “Investors”), an aggregate of 18,480 shares of its newly designated Series B-2 Cumulative Convertible Preferred Stock, par value $0.01 per share (the “Series B-2 Preferred Stock”) and (b) warrants (the “Investor Warrants”) to purchase 59,136,000 shares of the Company’s common stock (the “Warrant Shares” and together with the Series B-2 Preferred Stock, the “Series B-2 Offering”).  The Series B-2 Offering included the issuance of 2,052 shares of Series B-2 Preferred Stock and Investor Warrants to purchase 6,566,400 Warrant Shares, upon the conversion of $2,052,000 in indebtedness of the Company, including the conversion of $2,000,000 of notes payable to Marvin Rosen, $50,000 of other Company indebtedness payable to Matthew Rosen, Fusion’s Chief Executive Officer, and $2,000 payable to another Director of the Company.  Gross cash proceeds from the Series B-2 Offering were $16,428,000, and were used to partially finance the acquisition of the Broadvox Assets and for general corporate purposes.
	Each share of Series B-2 Preferred Stock has a Stated Value of $1,000, and is convertible into shares of the Company’s common stock at a conversion price of $0.10 per share (the “Preferred Conversion Price”), subject to adjustment.  Subject to the other terms of the Series B-2 Preferred Stock, the Series B-2 Preferred Stock sold to the Investors is convertible into an aggregate of 184,800,000 shares of the Company’s common stock (the “Conversion Shares”).
	The Investor Warrants may be exercised at any time following the Share Authorization Date (as defined below), for a number of Warrant Shares that is equal to 40% of the Stated Value divided by one hundred and twenty 125% of the Preferred Conversion Price, as adjusted for stock splits, combinations and reclassifications (the “Investor Warrant Exercise Price”).  Each Investor Warrant will be exercisable at the Investor Warrant Exercise Price for a five-year term commencing on the date of issuance.
	The Series B-2 Preferred Stock may not be converted, and the Investor Warrants may not be exercised, until the effective date of an amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares of the Company’s common stock sufficient to permit all of the outstanding Series B-2 Preferred Stock and Investor Warrants to be converted or exercised, as the case may be, into the Company’s common stock (the “Share Authorization Date”).  On January 30, 2014, the Company filed a proxy statement with the SEC seeking stockholder authorization to increase the number of authorized shares of common stock.
	Subject to certain exceptions, the Company also agreed that, within 45 days following the Share Authorization Date, it will file a registration statement with the SEC registering the resale of the Conversion Shares and the Investor Warrant Shares, and to use its reasonable commercial efforts to cause the registration statement to become effective not more than 150 days thereafter.  The registration rights agreement with the Investors provides that in the event the Company fails to timely file the registration statement, fails to cause the registration statement to become effective within the time provided, or fails to provide Investors with an effective registration statement permitting re-sales by the Investors, then as liquidated damages and not as a penalty, the Company is required to pay each Investor an amount equal to 1% of the aggregate amount invested by such Investor for each 30-day period or pro rata portion thereof following the date by which such registration statement should have been filed or become effective; provided, that the maximum payment to each Investor shall not exceed 6% of the aggregate amount invested by such Investor.
	Commencing January 1, 2016, the Company has the right to force the conversion of the Series B-2 Preferred Stock into common stock at the Preferred Conversion Price; provided that the volume weighted average price for Fusion’s Common stock is at least $0.25 for ten consecutive trading days.  In addition, shares of Series B-2 Preferred Stock bear a cumulative 6% annual dividend payable quarterly in arrears commencing March 31, 2014, in cash or shares of common stock, at the option of the Company.
	The Investor Warrants provide for a downward adjustment of the exercise price if the Company were to issue common stock at an issuance price or issue convertible debt or equity securities with an exercise price that is less than the Investor Warrant Exercise Price.  As a result, the Investor Warrants are deemed not indexed to the Company’s common stock under the guidance provided by ASC Topic 815.  Accordingly, the Company recognized a derivative liability of approximately $6.0 million at December 31, 2013 for the fair value of the Investor Warrants based on a Black-Scholes valuation.
	Holders of Series B-2 Preferred Stock have liquidation rights that are senior to those afforded to holders of the Company’s other equity securities, and holders of Series B-2 Preferred Stock are entitled to vote as one group with holders of common stock on all matters brought to a vote of holders of common stock (with each share of Series B-2 Preferred Stock being entitled to that number of votes into which the registered holder could have converted the Series B-2 Preferred Stock on the record date for the meeting at which the vote will be cast).  Holders of common stock are also entitled to vote as a separate class on all matters adversely affecting such class.
	The Company sold the Series B-2 Preferred Stock and Investor Warrants through its officers and directors, in conjunction with the assistance of certain select broker-dealers.  The Company paid aggregate cash compensation to the broker-dealers of $0.7 million, and issued or is obligated to issue warrants to the broker-dealers or their respective designees to purchase 4,486,900 shares of the Company’s common stock.  Such warrants are exercisable for a period of 5 years at an exercise price of $0.125 per share and the shares of common stock issuable upon exercise of such warrants are afforded the same registration rights as are provided to purchasers of Series B-2 Preferred Stock
	Between October 22, 2012 and October 24, 2012, the Company entered into subscription agreements with 91 accredited investors, pursuant to which the Company sold 6,027.75 investment Units consisting of (a) 6,027.75 shares of its Series B-1 Preferred Stock, (b) Fixed Warrants (the “Fixed Warrants”) to purchase 22,013,915 shares of Fusion’s common stock (the “Fixed Warrant Shares”), and (c) Contingent Warrants (the “Contingent Warrants”) to purchase 11,006,958 shares of Fusion’s common stock for gross proceeds of $6,027,750 (the “Series B-1 Offering”).  In addition, $750,000 of previously issued notes payable to related parties (see note 13) were converted, and an additional $84,000 of obligations of the Company payable to Mathew Rosen and another member of the Company’s management were satisfied, through the issuance of investment Units on the same terms as those received by the participants in the Series B-1 Offering.  At December 31, 2012, the Company had 6,861.75 shares of Series B-1 Preferred Stock outstanding.
	Each share of Series B-1 Preferred Stock had a Stated Value of $1,000, and was convertible into a number of shares of the Company’s common stock that is equal to the Stated Value divided by the volume-weighted-average price of the Company’s common stock for the 10 trading days prior to the closing (the “Series B-1 Preferred Conversion Price”).  Based upon that calculation, and subject to the other terms of the Series B-1 Preferred Stock, the Series B-1 Preferred Stock outstanding as of December 31, 2012 was convertible into an aggregate of 62,672,008 shares of the Company’s common stock.
	The Fixed Warrants may be exercised at any time following the Series B-1 Share Authorization Date (as defined below), for a number of Warrant Shares that is equal to fifty (50%) percent of the Stated Value of the Series B-1 Preferred Stock divided by 125% of the Series B-1 Preferred Conversion Price, as adjusted for stock splits, combinations and reclassifications (the “Fixed Warrant Exercise Price”).  Each Fixed Warrant is exercisable at the Fixed Warrant Exercise Price for a five-year term commencing on the date of issuance.
	The Contingent Warrants contained an “Expiration Event” that was triggered on the filing by the Company with the Federal Communications Commission of a request for the approval of the transfer of the licenses and operating authorities associated with the then pending acquisition of NBS, or a similar business combination.  As of the date of the closing of the Series B-1 Offering, the Company had filed for and received approval from the Federal Communications Commission for the transfer of such licenses and operating authorities related to NBS.  As a result, an Expiration Event occurred and the Contingent Warrants expired.
	The Series B-1 Preferred Stock could not be converted, and the Fixed Warrants could not be exercised, until the effective date of an amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares of the Company’s common stock sufficient to permit all of the outstanding Series B-1 Preferred Stock and Fixed Warrants to be converted or exercised, as the case may be, into shares of Fusion’s common stock (the “Series B-1 Share Authorization Date”).  The Company received stockholder authorization to increase the number of authorized shares of common stock to 550,000,000 shares on February 15, 2013.  The amendment was filed with the Secretary of State of Delaware on February 21, 2013.  Upon such filing, the Series B-1 Share Authorization Date was fixed, the Series B-1 Preferred Stock became convertible in accordance with its terms and the Fixed Warrants became exercisable.
	On September 30, 2013, in accordance with the terms of the Series B-1 Preferred Stock, the Company caused all of the outstanding Preferred Shares to be converted into 62,672,008 shares of common stock.  No shares of Series B-1 Preferred Stock were outstanding as of December 31, 2013.
	The Series B-1 Offering was exempt from registration under the Securities Act of 1933, as amended, by reason of Section 4(2) and Rule 506 of Regulation D thereunder.  The Company incurred approximately $295,000 of expenses, including commissions and legal fees, related to the offering.  The net proceeds of approximately $5,732,000 were used to:
	●	Repay $250,000 borrowed from Marvin Rosen and another Fusion director on September 17, 2012.
	●	Repay a $300,000 unrelated party loan received on June 22, 2012.
	●	Repay approximately $173,000 in satisfaction of all amounts due to the issuer of the letter of credit that was drawn down in 2011.
	●	Fund a portion of the purchase price of the acquisition of NBS; and
	●	For general corporate purposes.
	As of December 31, 2013 and 2012, Fusion had an aggregate of 5,045 shares of Series A-1, A-2 and A-4 Cumulative Convertible Preferred Stock outstanding.  Holders of the Series A Preferred Stock are entitled to receive cumulative dividends at the rate of 8% per annum payable in arrears, when, as and if declared by the Company’s Board of Directors, on January 1 of each year.  The following table summarizes the activity in the Company’s various classes of preferred stock for the years ended December 31, 2013 and 2012:
			Series A-1 Preferred Stock						Series A-2 Preferred Stock						Series A-4 Preferred Stock					Series B-1 Preferred Stock			Series B-2 Preferred Stock					Total
			Shares			$			Shares			$			Shares			$		Shares		$	Shares			$		Shares		$
	Balance at December 31, 2011			2,375				24				2,625				26			45			-		-			-		-		-	5,045		50
	Issuance of shares for cash																							6,028			60					6,028		60
	Conversion of notes payable																							834			9					834		9
	Balance at December 31, 2012			2,375				24				2,625				26			45			-		6,862			69		-		-	11,907		119
	Conversion of notes payable																												2,052		21	2,052		21
	Conversion of preferred stock into common stock																							(6,862	)		(69	)				(6,862	)	(69	)
	Issuance of shares for cash																												16,428		164	16,428		164
	Balance at December 31, 2013			2,375				24				2,625				26			45			-		-			-		18,480		185	23,525		235
	Common Stock
	During the year ended December 31, 2013, the Company entered into subscription agreements with 60 accredited investors, under which the Company issued an aggregate of 50,257,163 shares of common stock and five-year warrants to purchase 25,128,583 shares of the Company’s common stock for aggregate consideration of $4.1 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 year ended December 31, 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.
	During the year ended December 31, 2013, the Company issued an aggregate of 955,564 shares of common stock to third parties for services valued at $98,251.
	During the year ended December 31, 2012, the Company entered into subscription agreements with 29 accredited investors, under which the Company issued an aggregate of 10,762,718 shares of common stock and five-year warrants to purchase 3,339,940 shares of the Company’s common stock for aggregate consideration of $1.2 million.  The warrants are exercisable at 112%-125% of the average closing price of the Company’s common stock for the five trading days prior to closing.
	In February of 2012, two of the Company’s executive officers converted an aggregate of $35,000 owed to them by the Company into 444,445 shares of common stock and five-year warrants to purchase 133,335 shares of common stock.  The warrants are exercisable at approximately 112% of the average closing price of the Company’s common stock for the five trading days prior to the conversion.
	On October 29, 2012, the Company issued 11,363,636 shares of common stock valued at $1.25 million as part of the purchase price of NBS, and issued 454,545 shares of common stock valued at $50,000 in connection with its entering into an executive employment agreement with Jonathan Kaufman.
	As of December 31, 2013 and 2012, the number of shares of common stock that the Company is authorized to issue was 550,000,000 and 300,000,000, respectively, and the number of shares of common stock issued and outstanding were 303,833,242 and 178,250,533, respectively.
	Stock Options and Warrants
	In accordance with the Company's 2009 Stock Option Plan, the Company reserved 7,000,000 shares of common stock for issuance to employees at exercise prices determined by the Board of Directors.  On February 15, 2013, the Company’s stockholders ratified an increase in the number of shares available for issuance under the 2009 Stock Option Plan to 16,500,000.  Options under the plan typically vest in annual increments over a three or four year period, expire ten years from the date of grant and are issued at exercise prices no less than 100% of the fair market value at the time of grant. The Company has also reserved 2,617,400 shares for issuance in the event of exercise of outstanding options granted under the now expired 1998 Stock Option Plan
	The following summary presents information regarding outstanding options as of December 31, 2013 and 2012 and changes during the years then ended with regard to all options:
			Number of Options				Weighted Average Exercise Price			Weighted Average Remaining
										Contract Term
	Outstanding at December 31, 2011			6,634,261			$	0.75		6.86 years
	Granted in 2012			2,511,500				0.11
	Forfeitures in 2012			(147,291	)			0.11
	Expirations in 2012			(134,209	)			0.21
	Outstanding at December 31, 2012			8,864,261				0.58		6.93 years
	Granted in 2013			9,043,610				0.08
	Forfeitures in 2013			(152,625	)			0.11
	Expirations in 2013			(184,486	)			1.1
	Outstanding at December 31, 2013			17,570,760			$	0.33		7.81 years
	Exercisable at December 31, 2013			6,482,026			$	0.73		5.12 years
	The following table summarizes information about stock options outstanding as of December 31, 2013:
	Range of Exercise				Options Outstanding				Weighted Average				Weighted Average				Options Exercisable			Weighted Average
	Prices								Life (Years)				Price							Price
	$	0.06 - $0.10				10,500,985				9.3			$	0.08				990,751		$	0.09
	$	0.11 - $0.17				4,450,375				7.3				0.11				2,872,375			0.11
	$	0.18 - $0.31				908,000				3.85				0.31				907,500			0.31
	$	0.39 - $0.69				642,000				3.25				0.69				642,000			0.69
$	0.75 - $2.28				175,750				2.45				2.28				175,750			2.28
$	2.46 - $4.38				841,150				1.33				3.41				841,150			3.41
$	4.70 - $6.45				52,500				1.15				6.2				52,500			6.2
					17,570,760				7.81			$	0.33				6,482,026		$	0.73
The weighted-average estimated fair value of stock options granted was $.07 and $.08 during the years ended December 31, 2013 and 2012, respectively.  No stock options were exercised during the years ended December 31, 2013 and 2012.  As of December 31, 2013, there was approximately $675,000 of total unrecognized compensation cost related to stock options granted under the Company’s stock incentive plan which is expected to be recognized over a weighted-average period of 2.39 years.
The Company, as part of various debt and equity financing transactions and other agreements, has issued warrants to purchase shares of Fusion’s common stock.  The following summarizes the information relating to warrants issued and the activity during the years ended December 31, 2013 and 2012:
		Number of				Per Share				Weighted Average Exercise Price
		Warrants				Exercise Price
Outstanding at December 31, 2011			47,615,186				0.08-1.67			$	0.25
Granted in 2012			43,827,454				0.01-0.16				0.1
Exercised in 2012			-				-
Expired in 2012			(1,468,161	)			0.48-0.64				0.61
Outstanding at December 31, 2012			89,974,479				0.08-1.67				0.18
Granted in 2013			117,691,970				0.01-0.17				0.1
Expired in 2013			(6,875,289	)			0.14-0.46				0.28
Exercised in 2013			-				-
Outstanding at December 31, 2013			200,791,160								0.125
All warrants are fully exercisable upon issuance, except for the 59,136,000 Investor Warrants issued as part of the Series B-2 Preferred Offering, which will not become exercisable until the Share Authorization Date.
As a result of the warrants issued in connection with conversions of indebtedness and satisfaction of other liabilities of the Company, the Company recognized a loss on the extinguishment of debt in the amount of $1,105,283 and $335,315 in the years ended December 31, 2013 and 2012, respectively.

15_Income_Taxes

15. Income Taxes	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
15. Income Taxes	'
	The provision for income taxes for the years ending December 31, 2013 and 2012 consists of the following:
		2013			2012
	Deferred
	Federal	$	(1,843,000	)	$	(1,148,000	)
	State		-			-
			(1,843,000	)		(1,148,000	)
	Current
	Federal		-			-
	State		51,887
			51,887			-
	Change in valuation allowance		1,843,000			1,148,000
	Tax Provision	$	51,887		$	-
	The following reconciles the Federal statutory tax rate to the effective income tax rate for the years ended December 31, 2013 and 2012 :
		2013			2012
		%			%
	Federal statutory rate		(34.0	)		(34.0	)
	State net of federal tax		(2.9	)		(3.9	)
	Other		1.6			15.9
	Change in valuation allowance		36.3			22
			1			-
	The components of the Company's deferred tax assets and liabilities consist of the following at December 31, 2013 and 2012:
		2013			2012
	Deferred income tax assets:
	Net operating losses	$	44,365,000		$	44,144,000
	Allowance for doubtful accounts		52,000			102,000
	Derivative liability		1,728,000			405,000
	Accrued liabilities and other		999,000			398,000
	Intangible Assets		504,000			-
	Property and equipment		337,000			120,000
			47,985,000			45,169,000
	Deferred Income tax Liabilities:
	Debt discount		1,664,000			690,000
			1,664,000			690,000
	Deferred tax asset, net		46,321,000			44,479,000
	Less: Valuation Allowance		(46,321,000	)		(44,479,000	)
	Net Deferred Tax Assets	$	-		$	-
	At December 31, 2013 and 2012, the Company has net operating loss carry forwards of approximately $132.7 million and $129.2 million, respectively, that may be applied against future taxable income, and which expire in various years from 2015 to 2033.  Under the Tax Reform Act of 1986, the amounts of and benefits from net operating loss carry forwards and credits may be impaired or limited in certain circumstances.  Events which cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50%, as defined, over a three year period.  The amount of such limitation, if any has not been determined.
	The Company maintains a full valuation allowance for its net deferred tax assets, as the Company’s management has determined that it is more likely than not that the Company will not generate sufficient future taxable income to be able to utilize these deferred tax assets.

16_Supplemental_Disclosure_of_

16. Supplemental Disclosure of Cash Flow Information	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
16. Supplemental Disclosure of Cash Flow Information	'
	Supplemental cash flow information for the years ended December 31, 2013 and 2012 is as follows:
		2013			2012
	Supplemental disclosure of cash flow information:
	Cash paid for interest	$	1,912,283		$	355,887
	Supplemental schedule of non-cash investing and financing activities:
	Conversion of notes payable - related parties and accrued expenses
	to common stock	$	1,003,233		$	160,000
	Transfer of restricted cash in satisfaction of accounts payable	$	274,048		$	274,048
	Equipment financing obligation	$	359,675		$	232,066
	Conversion of notes payable - related parties and accrued expenses
	to preferred stock	$	2,052,000		$	834,000
	Preferred stock converted into common stock	$	6,027,750		$	-
	The following table represents cash paid, common stock issued and liabilities assumed for the acquisition of the Broadvox Assets in 2013 and of NBS in 2012 (see note 3):
		2013			2012
	Fair value of assets acquired	$	34,139,636		$	22,858,244
	Cash paid		(32,108,450	)		(17,750,000	)
	Debt issued		-			(600,000	)
	Common stock issued		-			(1,250,000	)
	Liabilities assumed	$	2,031,186		$	3,258,244

17_Commitments_and_Contingenci

17. Commitments and Contingencies	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
17. Commitments and Contingencies	'
	Leases
	The Company has various non-cancelable operating lease agreements for office facilities. A summary of the lease commitments under non-cancelable leases for years ending subsequent to December 31, 2013 are approximately as follows:
	Year Ending December 31:
	2014		2,022,000
	2015		1,640,000
	2016		777,000
	2017		545,000
	2018 and thereafter		-
		$	4,984,000
	Rent expense for all operating leases was $1.0 million for each of the years ended December 31, 2013 and 2012.  Certain of the Company’s leases include fixed rent escalation schedules or rent escalations based upon a fixed percentage.  The Company recognizes rent expense (including escalations) on a straight-line basis over the lease term.
	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 has since made all of the payments demanded by the landlord in the lawsuit, and the lawsuit has been dismissed.
	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 year ended December 31, 2013 reflects insurance proceeds of approximately $248,000, 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.
	As of December 31, 2013, the Company has no material outstanding purchase commitments with any equipment vendors.

18_Profit_Sharing_Plan

18. Profit Sharing Plan	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
18. Profit Sharing Plan	'
	The Company has a defined contribution profit sharing plan, which covers all employees who meet certain eligibility requirements. Contributions to the plan are made at the discretion of the Board of Directors. No contributions to the profit sharing plan were made for the years ended December 31, 2013 and 2012.

19_Concentrations

19. Concentrations	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
19. Concentrations	'
	Major Customers
	For the year ended December 31, 2013, one customer accounted for more than 10% of the Company’s consolidated revenues. The amount owed to the Company by this customer was approximately $543,000, or 9% of the Company’s consolidated accounts receivable.
	For the year ended December 31, 2012, two customers accounted for more than 10% of the Company’s consolidated revenues, and these two customers combined accounted for 36.6% of the Company’s consolidated revenues. At December 31, 2012 the aggregate amount owed to the Company by these customers, both of which are in the Company’s Carrier Services business segment, was approximately $150,000, or 5% of the Company’s consolidated accounts receivable.
	Geographic Concentrations
	The Company’s operations are significantly influenced by economic factors and risks inherent in conducting business in foreign countries, including government regulations, currency restrictions and other factors that may significantly affect management’s estimates and the Company’s performance.
	For the years ended December 31, 2013 and 2012, the Company generated approximate revenues from customers in the following countries:
		2013		2012
	United States	$	53,912,000	$	37,750,000
	Other		7,585,000		6,538,000
		$	61,497,000	$	44,288,000
	Revenues by geographic area are based upon the location of the customers.
	Credit Risk
	The Company maintains its cash balances in high credit quality financial institutions. The Company’s cash balances may, at times, exceed the deposit insurance limits provided by the Federal Deposit Insurance Corp.

20_Gain_on_Extinguishment_of_A

20. Gain on Extinguishment of Accounts Payable	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
20. 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 associated with the Carrier Services business segment in the amount $2,908,882. As a result, the Company derecognized the payable from its consolidated balance sheet and recorded a corresponding gain on the extinguishment of debt, net of legal fees in the amount of $25,222.

21_Segment_Information

21. Segment Information	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
21. Segment Information	'
	The accounting and reporting requirements on Disclosures about Segments of an Enterprise and Related Information 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 measurement of segment profit exclude the Company’s executive, administrative and support costs. 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 years ended December 31, 2013 and 2012 is summarized as follows:
		2013
		Carrier Services			Business Services			Corporate and Unallocated			Consolidated
	Revenues	$	31,122,771		$	30,373,849		$	-		$	61,496,620
	Cost of revenues (exclusive of
	depreciation and amortization)		27,842,245			14,874,931			-			42,717,176
	Gross profit		3,280,526			15,498,918			-			18,779,444
	Depreciation and amortization		222,943			3,261,932			87,099			3,571,974
	Selling, general and administrative expenses		3,070,678			10,298,063			5,387,584			18,756,325
	Interest expense		-			(2,300,237	)		(338,012	)		(2,638,249	)
	Loss on extinguishment of debt								(1,105,283	)		(1,105,283	)
	Loss on change in fair value of derivative liability								(598,292	)		(598,292	)
	Other income (expenses)		(180,948	)		104,548			53,403			(22,997	)
	Gain on extinguishment of accounts payable		2,883,660			-			-			2,883,660
	Provision for income taxes		-			(26,887	)		(25,000	)		(51,887	)
	Net income (loss) from continuing operations	$	2,689,617		$	(283,653	)	$	(7,487,867	)	$	(5,081,903	)
	Total assets	$	3,021,463		$	58,487,324		$	7,441,874		$	68,950,661
	Capital expenditures	$	180,415		$	1,111,386		$	15,548		$	1,307,349
		2012
		Carrier Services			Business Services			Corporate and Unallocated			Consolidated
	Revenues	$	37,457,674		$	6,829,835		$	-		$	44,287,509
	Cost of revenues (exclusive of
	depreciation and amortization)		34,031,165			3,631,206			-			37,662,371
	Gross profit		3,426,509			3,198,629			-			6,625,138
	Depreciation and amortization		340,624			571,493			86,672			998,789
	Selling, general and administrative expenses		3,299,648			3,491,077			3,648,242			10,438,967
	Interest expense		-			(384,815	)		(238,645	)		(623,460	)
	Loss on extinguishment of debt								(335,315	)		(335,315	)
	Loss on change in fair value of derivative liability								799,500			799,500
	Other income (expenses)		(337,749	)		26,197			34,857			(276,695	)
	Provision for income taxes		-									-
	Net loss from continuing operations	$	(551,512	)	$	(1,222,559	)	$	(3,474,517	)	$	(5,248,588	)
	Total assets	$	2,235,099		$	23,079,280		$	1,754,048		$	27,068,427
	Capital expenditures	$	107,121		$	272,922		$	18,933		$	398,976
	The Company employs executive, administrative, human resources, and finance resources that service both the Carrier Services and Business Services business segments. The amounts reflected as Corporate & Unallocated represent those operating expenses, assets and capital expenditures that were not allocated to a business segment or product line.

22_Fair_Value_Disclosures

22. Fair Value Disclosures	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
22. 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
	Non-current liabilities:
	For the year ended December 31, 2013:
	Derivative liability		$	10,515,472		$	10,515,472
	For the year ended December 31, 2012:
	Derivative liability		$	1,066,000		$	1,066,000

23_Related_Party_Transactions

23. Related Party Transactions	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
23. 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 $226,000 and $1,159,000 remained outstanding to the Sellers of NBS as of December 31, 2013 and December 31, 2012, respectively. These amounts are reflected in Related party payable in the accompanying consolidated balance sheets.
	In addition to the financing transactions discussed in notes 13 and 14, 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.As of December 31, 2013 and 2012, the Company had received $0 and $22,500 of advance payments in connection with this agreement, which is reflected in accounts payable and accrued expenses in the Company’s consolidated balance sheet.

24_Subsequent_Events

24. Subsequent Events	12 Months Ended
	Dec. 31, 2013
Notes to Financial Statements	'
24. Subsequent Events	'
	At a closing held on January 24, 2014 (the “Second Closing”), the Company accepted subscriptions from and issued to a total of 39 accredited investors an aggregate of 4,358 shares of its Series B-2 Preferred Stock and Investor Warrants to purchase 13,945,600 shares of the Company’s common stock and received gross cash proceeds of $4,358,000.  The proceeds, net of transaction expenses, will be used for general corporate purposes.   The Series B-2 Preferred Stock and Investor Warrants issued to Investors in the Second Closing contain terms that are identical to those described in note 14. In addition, since the Investor Warrants issued in the Second Closing are not indexed to the Company’s common stock, the Company recognized a derivative liability associated with these warrants in the amount of $1.3 million.
	On March 28, 2014, the Company held its 2013 Annual Meeting of Stockholders (the “Annual Meeting”) at which, among other things, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of shares of common stock that the Company is authorized to issue from 550,000,000 to 900,000,000. The amendment was filed with the Secretary of State of Delaware on March 28, 2014. Upon such filing, the Share Authorization Date was fixed, the Series B-2 Preferred Stock became convertible in accordance with its terms and the Investor Warrants became exercisable.

2_Summary_Of_Significant_Accou1

2. Summary Of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Summary Of Significant Accounting Policies Policies

'

Basis of Presentation and Consolidation

'

The consolidated financial statements include the accounts of Fusion and its wholly owned subsidiaries (see note 3). The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with Regulation S-X of the Securities and Exchange Commission (the “SEC”). All inter-company accounts and transactions have been eliminated in consolidation, and certain prior year balances have been reclassified to conform to the current presentation.

Revenue Recognition

'

The Company recognizes revenue when persuasive evidence of a sale arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed and determinable, and collectability is reasonably assured. The Company records provisions against revenue for billing adjustments, which are based upon estimates derived from factors that include, but are not limited to, historical results, analysis of credits issued and current economic trends. The provisions for revenue adjustments are recorded as a reduction of revenue when incurred.

The Company’s revenue is primarily derived from usage fees charged to other telecommunications carriers that terminate voice traffic over the Company’s network, and from the monthly recurring and usage fees charged to customers that purchase the Company’s business products and services.

Variable revenue is earned based on the length of a call, as measured by the number of minutes of duration. It is recognized upon completion of the call, and is adjusted to reflect the Company’s allowance for billing adjustments. Revenue for each customer is calculated from information received through the Company’s network switches. The Company’s customized software tracks the information from the switches and analyzes the call detail records against stored detailed information about revenue rates. This software provides the Company with the ability to complete a timely and accurate analysis of revenue earned in a period. The Company believes that the nature of this process is such that recorded revenues are unlikely to be revised in future periods.

Fixed revenue is earned from monthly recurring services provided to the customer, for which the charges are contracted for over a specified period of time. Revenue recognition commences after the provisioning, testing and acceptance of the service by the customer. The recurring customer charges continue until the expiration of the contract, or until cancellation of the service by the customer. To the extent that payments received from a customer are related to a future period, the payment is recorded as deferred revenue until the service is provided or the usage occurs.

Cost of Revenues

'

Cost of revenues for the Company’s Carrier Services business segment is comprised primarily of costs incurred from other domestic and international communications carriers to originate, transport, and terminate voice calls for the Company’s carrier customers. Thus the majority of the Company’s cost of revenues for this business segment is variable, based upon the number of minutes actually used by the Company’s customers and the destinations they are calling. Call activity is tracked and analyzed with customized software that analyzes the traffic flowing through the Company’s network switch. During each period, the call activity is analyzed and an accrual is recorded for the revenues associated with minutes not yet invoiced. This cost accrual is calculated using minutes from the system and the variable cost of revenue based upon predetermined contractual rates. Fixed expenses reflect the costs associated with connectivity between the Company’s network infrastructure, including its New York switching facility, and certain large carrier customers and vendors.

For the Company’s Business Services business segment, fixed expenses include the monthly recurring charges associated with certain platform services purchased from other service providers, the monthly recurring costs associated with private line services and the cost of broadband Internet access used to provide service to business customers.

Accounts Receivable and Allowance for Doubtful Accounts

'

Accounts receivable are recorded net of an allowance for doubtful accounts. On a periodic basis, the Company evaluates accounts receivable and records an allowance for doubtful accounts based on the Company’s history of past write-offs, collections experience and current credit conditions. Specific customer accounts are written off as uncollectible when collection efforts have been exhausted and payments are not expected to be received.

The Company has an agreement to sell certain of its accounts receivable under an arrangement with a third party (see note 4). 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.

Fair value of financial instruments

'

The carrying amounts of the Company’s assets and liabilities approximate their fair value presented in the accompanying consolidated balance sheets, due to their short maturities.

Intangible Assets

'

Intangible assets at December 31, 2013 and 2012 pertain to a trade name and trademark, non-compete agreements, proprietary technology, customer contracts and a below-market lease, all of which were acquired in the business combinations described in note 3. In determining fair value, the Company uses standard analytical approaches to business enterprise valuation (“BEV”), such as the income approach and the market comparable approach. The income approach involves estimating the present value of the subject asset’s future cash flows by using projections of the cash flows that the asset is expected to generate, and discounting these cash flows at a given rate of return. The market comparable approach is based on comparisons of the subject company to similar companies engaged in an actual merger or acquisition or to public companies whose stocks are actively traded. Each of these BEV methodologies requires the use of management estimates and assumptions. Amortization is recognized on a straight-line basis over the estimated useful lives of the respective assets, which ranges from two to fifteen years.

Goodwill

'

Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired (see note 3). Goodwill at December 31, 2013 and 2012 was $5.1 million and $2.4 million, respectively. Goodwill is not amortized but is instead tested annually for impairment. All of the Company’s goodwill is attributable to its Business Services business segment. The following table presents the change in goodwill during the years ended December 31, 2013 and 2012:

Balance at January 1, 2013

Additions (a)

Other (b)

Balance at December 31, 2013

Balance at January 1, 2012

Additions (a)

Other (b)

Balance at December 31, 2012

$

2,406,269

2,520,605

197,256

$

5,124,130

$

-

2,381,201

25,068

$

2,406,269

(a) - Amount relates to acquisitions.  See note 3.

(b) - Amount relates to adjustments to the preliminary purchase price for 2012 acquisitions.

Impairment of Long-Lived Assets

'

The Company reviews long-lived assets, including intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the carrying value of the asset exceeds the projected undiscounted cash flows, the Company is required to estimate the fair value of the asset and recognize an impairment charge to the extent that the carrying value of the asset exceeds its estimated fair value. The Company did not record any impairment charges for the years ended December 31, 2013 and 2012.

Impairment testing for goodwill is performed annually in the Company’s fourth fiscal quarter. 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 authoritative guidance provides entities with an option to perform a qualitative assessment to determine if the fair value of the entity is less than its carrying value. The Company performed a qualitative impairment evaluation on the on the goodwill acquired on October 29, 2012 (see note 3) and determined that no impairment existed.

Property and Equipment

'

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets as follows:

Asset

Estimated Useful Lives

Network equipment

5 – 7 Years

Furniture and fixtures

3 – 7 Years

Computer equipment and software

3 – 5 Years

Customer premise equipment

2 – 3 Years

Leasehold improvements are depreciated over the shorter of the estimated useful lives of the assets or the term of the associated lease. Maintenance and repairs are recorded as a period expense, while betterments and improvements are capitalized.

Customer premise equipment primarily consists of switches, routers, handsets and ancillary items for which the Company retains title but are utilized at customer locations. At December 31, 2012, the Company had approximately $341,000 of such equipment which had been reflected as inventory in its consolidated balance sheet. The Company has reclassified this amount to property and equipment to more accurately reflect the nature, use and useful life of these assets.

The Company capitalizes a portion of its payroll and related costs for the development of software for internal use and amortizes these costs over three years. During the years ended December 31, 2013 and 2012, the Company capitalized costs pertaining to the development of internally used software in the approximate amount of $794,000 and $151,000, respectively.

Derivative Financial Instruments

'

The Company accounts for warrants issued in conjunction with the issuance of debt and equity in accordance with the guidance contained in ASC Topic 815, Derivatives and Hedging (“ASC 815”). For warrant instruments that are not deemed to be indexed to the Company’s own stock, the Company classifies the warrant instrument as a liability at its fair value and adjusts the instrument to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations (see notes 11, 14 and 22). The fair values of the warrants have been estimated using a Black-Scholes valuation model and the Company’s quoted market price.

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 $28,000 and $23,000 for the years ended December 31, 2013 and 2012, respectively.

Income Taxes

'

The accounting and reporting requirements with respect to income taxes require an asset and liability approach. 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 December 31, 2013 and 2012. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2010 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 December 31, 2013 and 2012. During the years ended December 31, 2013 and 2012, the Company recognized no adjustments for uncertain tax positions.

Earnings (Loss) per Share

'

Basic loss per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss 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. The following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:

2013

2012

Warrants

200,791,160

89,974,479

Stock options

17,570,760

8,864,261

Convertible preferred stock

192,563,181

70,064,862

410,925,101

168,903,602

The net loss per common share calculation includes a provision for preferred stock dividends in the approximate amount of $402,000 and $404,000 for the years ended December 31, 2013 and 2012, respectively. However, no cash dividend has been declared by the Board of Directors for any of the years presented. The dilutive securities in the year ended December 31, 2013 include preferred stock convertible into 184,800,000 shares of common stock and warrants to purchase 59,136,000 shares of common stock that contain a provision that prohibits their conversion or exercise until the Company files an amendment to its Certificate of Incorporation to increase the number of shares which it is authorized to issue sufficient to permit the preferred stock and warrants to be converted and exercised, respectively (see note 14).

Discontinued Operations

'

The Company classifies a business component that either has been disposed of or is classified as held for sale as a discontinued operation if the cash flow of the component has been or will be eliminated from ongoing operations and the Company will no longer have any significant continuing involvement in the component. The results of operations of the discontinued component through the date of disposition, including any gains or losses on disposition, are aggregated and presented in the consolidated statement of operations as income (loss) on discontinued operations. See note 9 for additional information regarding discontinued operations.

Stock based compensation

'

The Company accounts for stock-based compensation by recognizing the fair value of compensation cost for all stock and stock-based awards over the service period (generally equal to the vesting period). Compensation cost is determined using the Black-Scholes option pricing model to estimate the fair value of the awards at the grant date. An offsetting increase to stockholders’ equity is recorded equal to the amount of the compensation expense charge.

Stock-based compensation for the years ended December 31, 2013 and 2012 is comprised of the following:

2013

2012

Expenses associated with stock options granted to employees and directors

$

189,484

89,929

Common stock issued in connection with an employment agreement

-

50,000

Common stock or warrants issued or issuable for services rendered

106,585

59,825

$

296,069

199,754

Stock-based compensation is included in selling, general, and administrative expenses in the consolidated statements of operations and, with respect to stock option expense, 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 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:

2013

2012

Dividend yield

0

%

0

%

Stock volatility

137

%

138

%

Average Risk-free interest rate

0.68

%

1.74

%

Average option term (years)

3

4-Mar

Recently Adopted and Issued Accounting Pronouncements

'

During the years ended 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 that, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

Use of estimates

'

The preparation of consolidated 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 consolidated financial statements and the reported amounts of revenues and expenses during the year. Actual results could be affected by those estimates.

2_Summary_Of_Significant_Accou2

2. Summary Of Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2013
Summary Of Significant Accounting Policies Tables	'
Business acquisition cost for goodwill	'
	Balance at January 1, 2013				Additions (a)				Other (b)		Balance at December 31, 2013		Balance at January 1, 2012		Additions (a)		Other (b)		Balance at December 31, 2012
	$	2,406,269				2,520,605				197,256	$	5,124,130	$	-		2,381,201		25,068	$	2,406,269
Estimated useful lives	'
	Asset		Estimated Useful Lives
	Network equipment		5 – 7 Years
	Furniture and fixtures		3 – 7 Years
	Computer equipment and software		3 – 5 Years
	Customer premise equipment		2 – 3 Years
Following securities were excluded in the calculation of diluted loss per share	'
			2013				2012
	Warrants			200,791,160				89,974,479
	Stock options			17,570,760				8,864,261
	Convertible preferred stock			192,563,181				70,064,862
				410,925,101				168,903,602
Schedule of stock-based compensation	'
			2013		2012
	Expenses associated with stock options granted to employees and directors		$	189,484	89,929
	Common stock issued in connection with an employment agreement			-	50,000
	Common stock or warrants issued or issuable for services rendered			106,585	59,825
			$	296,069	199,754
Stock option pricing model	'
			2013				2012
	Dividend yield			0	%			0	%
	Stock volatility			137	%			138	%
	Average Risk-free interest rate			0.68	%			1.74	%
	Average option term (years)			3				4-Mar

3_Acquisitions_Tables

3. Acquisitions (Tables)	12 Months Ended
	Dec. 31, 2013
Acquisitions Tables	'
Purchase price allocated to the fair value of the net assets	'
	Accounts receivable	$	1,486,552
	Other current assets		127,161
	Property and equipment		8,139,318
	Intangible assets subject to amortization		21,866,000
	Goodwill		2,520,605
	Current liabilities		(2,031,186	)
		$	32,108,450
Schedule of net assets acquired	'
	Cash	$	496,352
	Accounts receivable		2,215,172
	Inventory		320,034
	Other current assets		214,463
	Property and equipment		1,463,322
	Other assets		2,600
	Intangible assets subject to amortization		15,765,000
	Goodwill		2,381,301
	Current liabilities, including $1,129,000 related to a working capital adjustment		(3,258,244	)
		$	19,600,000
Pro forma financial information	'
	($000’s)	For the year ended December 31,
		2013			2012
	Revenues	$	94,148		$	97,098
	Net loss	$	(12,490	)	$	(20,253	)

5_Intangible_Assets_Tables

5. Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2013
Intangible Assets Tables	'
Identifiable intangible assets	'
		31-Dec-13							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	$	(65,683	)	$	497,317	$	563,000	$	(9,383	)	$	553,617
	Proprietary technology		1,903,000		(444,033	)		1,458,967		1,903,000		(63,433	)		1,839,567
	Non-compete agreement		3,257,000		(1,266,611	)		1,990,389		3,257,000		(180,944	)		3,076,056
	Customer relationships		9,824,000		(754,988	)		9,069,012		9,824,000		(107,856	)		9,716,144
	Favorable lease intangible		218,000		(50,867	)		167,133		218,000		(7,267	)		210,733
	Total acquired intangibles		15,765,000		(2,582,182	)		13,182,818		15,765,000		(368,883	)		15,396,117
	Intangibles associated with the acquisition of the Broadvox Assets:
	Proprietary technology		3,878,000		-			3,878,000		-		-			-
	Non-compete agreements		5,471,000		-			5,471,000		-		-			-
	Customer relationships		12,517,000		-			12,517,000		-		-			-
	Total acquired intangibles		21,866,000		-			21,866,000		-		-			-
	Other intangibles:
	Trademarks		-		-			-		315,745		(315,745	)		-
	Intellectual property		-		-			-		86,397		(86,397	)		-
	Total	$	37,631,000	$	(2,582,182	)	$	35,048,818	$	16,167,142	$	(771,025	)	$	15,396,117
Estimated future aggregate amortization expense	'
	For the year ended December 31,
	2014	$	6,686,429
	2015		6,505,484
	2016		2,865,262
	2017		2,794,562
	2018		2,441,062

6_Prepaid_Expenses_and_Other_C1

6. Prepaid Expenses and Other Current Assets (Tables)	12 Months Ended
	Dec. 31, 2013
Prepaid Expenses And Other Current Assets Tables	'
Prepaid expenses and other current assets	'
		2013		2012
	Prepaid insurance	$	63,737	$	44,390
	Other prepaid expenses		404,818		308,631
	Escrowed funds – senior lenders		2,000,000		-
	Due from Prestige (see note 4)		236,232		648,428
	Total	$	2,704,787	$	1,001,449

7_Property_and_Equipment_Table

7. Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2013
Property And Equipment Tables	'
Schedule of property and equipment	'
		2013			2012
	Network equipment	$	7,675,786		$	3,318,217
	Furniture and fixtures		299,571			334,564
	Computer equipment and software		2,654,428			1,835,491
	Customer premise equipment		5,169,629			341,118
	Vehicles		55,884			55,884
	Leasehold improvements		993,799			949,190
	Assets in progress		-			274,009
	Total		16,849,097			7,108,473
	Less: accumulated depreciation		(5,655,742	)		(4,360,411	)
	Total	$	11,193,355		$	2,748,062

10_Accounts_Payable_and_Accrue1

10. Accounts Payable and Accrued Expenses (Tables)	12 Months Ended
	Dec. 31, 2013
Accounts Payable And Accrued Expenses Tables	'
Accounts payable and accrued expenses	'
		31-Dec-13		31-Dec-12
	Trade accounts payable	$	5,933,736	$	8,800,525
	Accrued expenses		3,101,103		993,618
	Accrued payroll and vacation		102,898		113,860
	Interest payable		421,632		93,458
	Deferred revenue		407,426		21,947
	Other		1,194,755		556,088
	Total accounts payable and accrued expenses	$	11,161,550	$	10,579,496

11_Notes_Payable_NonRelated_Pa

11. Notes Payable Non-Related Parties (Tables)	12 Months Ended
	Dec. 31, 2013
Notes Payable Non-Related Parties Tables	'
Components of notes payable non-related parties	'
		31-Dec-13			31-Dec-12
	Senior Notes	$	41,791,667		$	16,500,000
	Discount on Senior Notes		(4,377,680	)		(1,815,920	)
	Total notes payable - non-related parties		37,413,987			14,684,080
	Less:
	Current portion of Senior Notes		(625,000	)		(208,333	)
	Non-current portion notes payable - non-related parties	$	36,788,987		$	14,475,747

13_Notes_Payable_Related_Parti

13. Notes Payable Related Parties (Tables)	12 Months Ended
	Dec. 31, 2013
Notes Payable Related Parties Tables	'
Component of notes payable related party	'
		31-Dec-13			31-Dec-12
	NBS Sellers Notes	$	85,714		$	600,000
	Notes payable to Marvin Rosen		1,578,081			4,406,422
	Other notes payable - related parties		125,000			125,000
	Total notes payable - related parties		1,788,795			5,131,422
	Less:
	Current portion of NBS Sellers Notes		(85,714	)		(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	$	1,478,081		$	4,492,136

14_Equity_Transactions_Tables

14. Equity Transactions (Tables)	12 Months Ended
	Dec. 31, 2013
Equity Transactions Tables	'
Schedule of preferred stock	'
		Series A-1 Preferred Stock						Series A-2 Preferred Stock					Series A-4 Preferred Stock					Series B-1 Preferred Stock		Series B-2 Preferred Stock					Total
		Shares			$			Shares			$		Shares			$		Shares	$	Shares			$		Shares		$
	Balance at December 31, 2011		2,375				24				2,625			26			45		-		-			-		-		-	5,045		50
	Issuance of shares for cash																				6,028			60					6,028		60
	Conversion of notes payable																				834			9					834		9
	Balance at December 31, 2012		2,375				24				2,625			26			45		-		6,862			69		-		-	11,907		119
	Conversion of notes payable																									2,052		21	2,052		21
	Conversion of preferred stock into common stock																				(6,862	)		(69	)				(6,862	)	(69	)
	Issuance of shares for cash																									16,428		164	16,428		164
	Balance at December 31, 2013		2,375				24				2,625			26			45		-		-			-		18,480		185	23,525		235
Schedule of stock options and warrants	'
	The following summary presents information regarding outstanding options as of December 31, 2013 and 2012 and changes during the years then ended with regard to all options:
		Number of Options				Weighted Average Exercise Price			Weighted Average
									Remaining Contract Term
	Outstanding at December 31, 2011		6,634,261			$	0.75		6.86 years
	Granted in 2012		2,511,500				0.11
	Forfeitures in 2012		(147,291	)			0.11
	Expirations in 2012		(134,209	)			0.21
	Outstanding at December 31, 2012		8,864,261				0.58		6.93 years
	Granted in 2013		9,043,610				0.08
	Forfeitures in 2013		(152,625	)			0.11
	Expirations in 2013		(184,486	)			1.1
	Outstanding at December 31, 2013		17,570,760			$	0.33		7.81 years
	Exercisable at December 31, 2013		6,482,026			$	0.73		5.12 years
	The following table summarizes information about stock options outstanding as of December 31, 2013:
	Range of Exercise Prices		Options Outstanding				Weighted Average Life (Years)				Weighted Average Price			Options Exercisable			Weighted Average Price
	$0.06 - $0.10			10,500,985				9.3			$	0.08			990,751		$	0.09
	$0.11 - $0.17			4,450,375				7.3				0.11			2,872,375			0.11
	$0.18 - $0.31			908,000				3.85				0.31			907,500			0.31
	$0.39 - $0.69			642,000				3.25				0.69			642,000			0.69
	$0.75 - $2.28			175,750				2.45				2.28			175,750			2.28
	$2.46 - $4.38			841,150				1.33				3.41			841,150			3.41
	$4.70 - $6.45			52,500				1.15				6.2			52,500			6.2
				17,570,760				7.81			$	0.33			6,482,026		$	0.73
	The following summarizes the information relating to warrants issued and the activity during the years ended December 31, 2013 and 2012:
		Number of Warrants				Per Share Exercise Price				Weighted Average Exercise Price
	Outstanding at December 31, 2011		47,615,186				0.08-1.67			$	0.25
	Granted in 2012		43,827,454				0.01-0.16				0.1
	Exercised in 2012		-				-
	Expired in 2012		(1,468,161	)			0.48-0.64				0.61
	Outstanding at December 31, 2012		89,974,479				0.08-1.67				0.18
	Granted in 2013		117,691,970				0.01-0.17				0.1
	Expired in 2013		(6,875,289	)			0.14-0.46				0.28
	Exercised in 2013		-				-
	Outstanding at December 31, 2013		200,791,160								0.125

15_Income_Taxes_Tables

15. Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2013
Income Taxes Tables	'
Schedule of provision for income taxes	'
		2013			2012
	Deferred
	Federal	$	(1,843,000	)	$	(1,148,000	)
	State		-			-
			(1,843,000	)		(1,148,000	)
	Current
	Federal		-			-
	State		51,887
			51,887			-
	Change in valuation allowance		1,843,000			1,148,000
	Tax Provision	$	51,887		$	-
Schedule of Federal statutory tax rate	'
		2013			2012
		%			%
	Federal statutory rate		(34.0	)		(34.0	)
	State net of federal tax		(2.9	)		(3.9	)
	Other		1.6			15.9
	Change in valuation allowance		36.3			22
			1			-
Schedule of deferred tax assets and liability	'
		2013			2012
	Deferred income tax assets:
	Net operating losses	$	44,365,000		$	44,144,000
	Allowance for doubtful accounts		52,000			102,000
	Derivative liability		1,728,000			405,000
	Accrued liabilities and other		999,000			398,000
	Intangible Assets		504,000			-
	Property and equipment		337,000			120,000
			47,985,000			45,169,000
	Deferred Income tax Liabilities:
	Debt discount		1,664,000			690,000
			1,664,000			690,000
	Deferred tax asset, net		46,321,000			44,479,000
	Less: Valuation Allowance		(46,321,000	)		(44,479,000	)
	Net Deferred Tax Assets	$	-		$	-

16_Supplemental_Disclosure_of_1

16. Supplemental Disclosure of Cash Flow Information (Tables)	12 Months Ended
	Dec. 31, 2013
Supplemental Disclosure Of Cash Flow Information Tables	'
Supplemental Disclosure of Cash Flow Information	'
	Supplemental cash flow information for the years ended December 31, 2013 and 2012 is as follows:
		2013			2012
	Supplemental disclosure of cash flow information:
	Cash paid for interest	$	1,912,283		$	355,887
	Supplemental schedule of non-cash investing and financing activities:
	Conversion of notes payable - related parties and accrued expenses
	to common stock	$	1,003,233		$	160,000
	Transfer of restricted cash in satisfaction of accounts payable	$	274,048		$	274,048
	Equipment financing obligation	$	359,675		$	232,066
	Conversion of notes payable - related parties and accrued expenses
	to preferred stock	$	2,052,000		$	834,000
	Preferred stock converted into common stock	$	6,027,750		$	-
	The following table represents cash paid, common stock issued and liabilities assumed for the acquisition of the Broadvox Assets in 2013 and of NBS in 2012 (see note 3):
		2013			2012
	Fair value of assets acquired	$	34,139,636		$	22,858,244
	Cash paid		(32,108,450	)		(17,750,000	)
	Debt issued		-			(600,000	)
	Common stock issued		-			(1,250,000	)
	Liabilities assumed	$	2,031,186		$	3,258,244

17_Commitments_and_Contingenci1

17. Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2013
Commitments And Contingencies Tables	'
Schedule of Commitments and Contingencies	'
	Year Ending December 31:
	2014		2,022,373
	2015		1,640,064
	2016		777,321
	2017		544,822
	2018 and thereafter		-
		$	4,984,580

19_Concentrations_Tables

19. Concentrations (Tables)	12 Months Ended
	Dec. 31, 2013
Concentrations Tables	'
Schedule of Geographic Concentrations	'
		2013		2012
	United States	$	53,912,000	$	37,750,000
	Other		7,585,000		6,538,000
		$	61,497,000	$	44,288,000

21_Segment_Information_Tables

21. Segment Information (Tables)	12 Months Ended
	Dec. 31, 2013
Segment Information Tables	'
Operating segment information	'
		2013
		Carrier Services			Business Services			Corporate and Unallocated			Consolidated
	Revenues	$	31,122,771		$	30,373,849		$	-		$	61,496,620
	Cost of revenues (exclusive of
	depreciation and amortization)		27,842,245			14,874,931			-			42,717,176
	Gross profit		3,280,526			15,498,918			-			18,779,444
	Depreciation and amortization		222,943			3,261,932			87,099			3,571,974
	Selling, general and administrative expenses		3,070,678			10,298,063			5,387,584			18,756,325
	Interest expense		-			(2,300,237	)		(338,012	)		(2,638,249	)
	Loss on extinguishment of debt								(1,105,283	)		(1,105,283	)
	Loss on change in fair value of derivative liability								(598,292	)		(598,292	)
	Other income (expenses)		(180,948	)		104,548			53,403			(22,997	)
	Gain on extinguishment of accounts payable		2,883,660			-			-			2,883,660
	Provision for income taxes		-			(26,887	)		(25,000	)		(51,887	)
	Net income (loss) from continuing operations	$	2,689,617		$	(283,653	)	$	(7,487,867	)	$	(5,081,903	)
	Total assets	$	3,021,463		$	58,487,324		$	7,441,874		$	68,950,661
	Capital expenditures	$	180,415		$	1,111,386		$	15,548		$	1,307,349
		2012
		Carrier Services			Business Services			Corporate and Unallocated			Consolidated
	Revenues	$	37,457,674		$	6,829,835		$	-		$	44,287,509
	Cost of revenues (exclusive of
	depreciation and amortization)		34,031,165			3,631,206			-			37,662,371
	Gross profit		3,426,509			3,198,629			-			6,625,138
	Depreciation and amortization		340,624			571,493			86,672			998,789
	Selling, general and administrative expenses		3,299,648			3,491,077			3,648,242			10,438,967
	Interest expense		-			(384,815	)		(238,645	)		(623,460	)
	Loss on extinguishment of debt								(335,315	)		(335,315	)
	Loss on change in fair value of derivative liability								799,500			799,500
	Other income (expenses)		(337,749	)		26,197			34,857			(276,695	)
	Provision for income taxes		-									-
	Net loss from continuing operations	$	(551,512	)	$	(1,222,559	)	$	(3,474,517	)	$	(5,248,588	)
	Total assets	$	2,235,099		$	23,079,280		$	1,754,048		$	27,068,427
	Capital expenditures	$	107,121		$	272,922		$	18,933		$	398,976

22_Fair_Value_Disclosures_Tabl

22. Fair Value Disclosures (Tables)	12 Months Ended
	Dec. 31, 2013
Fair Value Disclosures Tables	'
Fair value of the liability measured at fair value on a recurring basis	'
		Level 1	Level 2		Level 3	Total
	Non-current liabilities:
	For the year ended December 31, 2013:
	Derivative liability		$	10,515,472		$	10,515,472
	For the year ended December 31, 2012:
	Derivative liability		$	1,066,000		$	1,066,000

Recovered_Sheet1

2. Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Summary Of Significant Accounting Policies Details	'	'
Beginning balance, goodwill	$2,406,269	'
Additions	2,520,605	2,381,201
Other	197,256	25,068
Ending balance, goodwill	$5,124,130	$2,406,269

Recovered_Sheet2

2. Summary of Significant Accounting Policies (Details 1 )	12 Months Ended
	Dec. 31, 2013
Network equipment [Member]	'
Estimated useful lives of property and equipment	'5 - 7 Years
Furniture and fixtures [Member]	'
Estimated useful lives of property and equipment	'3 - 7 Years
Computer equipment and software [Member]	'
Estimated useful lives of property and equipment	'3 - 5 Years
Customer premise equipment [Member]	'
Estimated useful lives of property and equipment	'2 - 3 Years

Recovered_Sheet3

2. Summary of Significant Accounting Policies (Details 2 )	Dec. 31, 2013	Dec. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	410,925,101	168,903,602
Warrant	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	200,791,160	89,974,479
Stock Options	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	17,570,760	8,864,261
Convertible Preferred	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	192,563,181	70,064,862

2_Summary_of_Significant_Accou3

2. Summary of Significant Accounting Policies (Details 3 ) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Summary Of Significant Accounting Policies Details 3	'	'
Expenses associated with stock options granted to employees and directors	$189,484	$89,929
Common stock issued in connection with an employment agreement	'	50,000
Common stock or warrants issued or issuable for services rendered	106,585	59,825
Total	$296,069	$199,754

2_Summary_of_Significant_Accou4

2. Summary of Significant Accounting Policies (Details 4 )	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Black-Scholes option-pricing model method with the following assumptions	'	'
Dividend yield	0.00%	0.00%
Stock volatility	137.00%	138.00%
Average Risk-free interest rate	0.68%	1.74%
Average option term (years)	'3 years	'
Minimum	'	'
Black-Scholes option-pricing model method with the following assumptions	'	'
Average option term (years)	'	'3 years
Maximum	'	'
Black-Scholes option-pricing model method with the following assumptions	'	'
Average option term (years)	'	'4 years

2_Summary_of_Significant_Accou5

2. Summary of Significant Accounting Policies (Details Narrative ) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summary Of Significant Accounting Policies Details Narrative	'	'	'
Goodwill	$5,124,130	$2,406,269	'
Customer premise equipment	'	341,000	'
Capitalized costs pertaining to development of software	794,000	151,000	'
Advertising and marketing expenses	28,000	23,000	'
Provision for preferred stock dividends	$402,000	$404,000	'
Common stock issuable on conversion of preferred stock, shares	184,800,000	'	'
Warrants to purchase common stock issuable on conversion of preferred stock	59,136,000	'	'

3_Acquisition_Details

3. Acquisition (Details) (BVX LLC [Member], USD $)	Dec. 31, 2013
BVX LLC [Member]	'
Accounts receivable	$1,486,552
Other current assets	127,161
Property and equipment	8,139,318
Intangible assets subject to amortization	21,866,000
Goodwill	2,520,605
Current liabilities	-2,031,186
Aggregate purchase price allocated to fair value of net assets	$32,108,450

3_Acquisition_Details_1

3. Acquisition (Details 1) (NBS [Member], USD $)	Dec. 31, 2013
NBS [Member]	'
Cash	$496,352
Accounts receivable	2,215,172
Inventory	320,034
Other current assets	214,463
Property and equipment	1,463,322
Other assets	2,600
Intangible assets subject to amortization	15,765,000
Goodwill	2,381,301
Current liabilities, including $1,129,000 related to a working capital adjustment	-3,258,244
Aggregate purchase price allocated to fair value of net assets acquired	$19,600,000

3_Acquisition_Details_2

3. Acquisition (Details 2 ) (USD $)	12 Months Ended
In Millions, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Acquisition Details 2	'	'
Revenues	$94,148	$97,098
Net loss	($12,490)	($20,253)

3_Acquisition_Details_Narrativ

3. Acquisition (Details Narrative ) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2013
Acquisition Details Narrative	'	'
Goodwill in connection with acquisition of NBS	'	$2,381,000
Working capital payment due to seller, adjustment	25,000	'
Working capital payment reflected as related party payables	1,160,000	226,000
Revenues related to NBS	4,500,000	'
Net loss related to NBS	$73,000	'

4_Sale_of_Accounts_Receivable_

4. Sale of Accounts Receivable (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Sale Of Accounts Receivable Details Narrative	'	'
Outstanding accounts receivable sold to Prestige	$900,000	$2,400,000
Loss on sale of accounts receivable	($226,261)	($334,931)

5_Intangible_Assets_Details

5. Intangible Assets (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Trademarks	'	'
Gross Carrying Amount	'	$315,745
Accumulated Amortization	'	-315,745
Total	'	'
Intellectual Property	'	'
Gross Carrying Amount	'	86,397
Accumulated Amortization	'	-86,397
Total	'	'
Total acquired intangibles	'	'
Gross Carrying Amount	37,631,000	16,167,142
Accumulated Amortization	-2,582,182	-771,025
Total	35,048,818	15,396,117
NBS [Member] | Trademarks and tradename [Member]	'	'
Gross Carrying Amount	563,000	563,000
Accumulated Amortization	-65,683	-9,383
Total	497,317	553,617
NBS [Member] | Proprietary technology [Member]	'	'
Gross Carrying Amount	1,903,000	1,903,000
Accumulated Amortization	-444,033	-63,433
Total	1,458,967	1,839,567
NBS [Member] | Non-compete agreement [Member]	'	'
Gross Carrying Amount	3,257,000	3,257,000
Accumulated Amortization	-1,266,611	-180,944
Total	1,990,389	3,076,056
NBS [Member] | Customer relationships [Member]	'	'
Gross Carrying Amount	9,824,000	9,824,000
Accumulated Amortization	-754,988	-107,856
Total	9,069,012	9,716,144
NBS [Member] | Favorable lease intangible [Member]	'	'
Gross Carrying Amount	218,000	218,000
Accumulated Amortization	-50,867	-7,267
Total	167,133	210,733
NBS [Member] | Total acquired intangibles [Member]	'	'
Gross Carrying Amount	15,765,000	15,765,000
Accumulated Amortization	-2,582,182	-368,883
Total	13,182,818	15,396,117
Broadvox [Member] | Proprietary technology [Member]	'	'
Gross Carrying Amount	3,878,000	'
Accumulated Amortization	'	'
Total	3,878,000	'
Broadvox [Member] | Non-compete agreement [Member]	'	'
Gross Carrying Amount	5,471,000	'
Accumulated Amortization	'	'
Total	5,471,000	'
Broadvox [Member] | Customer relationships [Member]	'	'
Gross Carrying Amount	12,517,000	'
Accumulated Amortization	'	'
Total	12,517,000	'
Broadvox [Member] | Total acquired intangibles [Member]	'	'
Gross Carrying Amount	21,866,000	'
Accumulated Amortization	'	'
Total	$21,866,000	'

5_Intangible_Assets_Details_1

5. Intangible Assets (Details 1) (USD $)	Dec. 31, 2013
Intangible Assets Details 1	'
2014	$6,686,429
2015	6,505,484
2016	2,865,262
2017	2,794,562
2018	$2,441,062

6_Prepaid_Expenses_and_Other_C2

6. Prepaid Expenses and Other Current Assets (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Prepaid expenses and other current assets	'	'
Prepaid insurance	$63,737	$44,390
Other prepaid expenses	404,818	308,631
Escrowed funds - senior lenders	2,000,000	'
Due from Prestige (see note 4)	236,232	648,428
Total	$2,704,787	$1,001,449

7_Property_and_Equipment_Detai

7. Property and Equipment (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Total	$16,849,097	$7,108,473
Less: accumulated depreciation	-5,655,742	-4,360,411
Total	11,193,355	2,748,062
Network equipment [Member]	'	'
Total	7,675,786	3,318,217
Furniture and fixtures [Member]	'	'
Total	299,571	334,564
Computer equipment and software [Member]	'	'
Total	2,654,428	1,835,491
Customer premise equipment [Member]	'	'
Total	5,169,629	341,118
Vehicles [Member]	'	'
Total	55,884	55,884
Leasehold improvements [Member]	'	'
Total	993,799	949,190
Assets in progress [Member]	'	'
Total	'	$274,009

7_Property_and_Equipment_Detai1

7. Property and Equipment (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Property And Equipment Details Narrative	'	'
Depreciation expense	$1,359,000	$464,000

8_Restricted_Cash_Details_Narr

8. Restricted Cash (Details Narrative) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Restricted Cash Details Narrative	'	'
Cash held in reserve	$1,000,000	$1,000,000
Certificates of deposit collateralizing letters of credit	$163,872	$26,326

9_Discontinued_Operations_Deta

9. Discontinued Operations (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2013
Discontinued Operations Details Narrative	'	'
Estimate of liabilities associated with consumer segment	$55,000	$55,000
Income from discontinued operations	$41,000	'

10_Accounts_Payable_and_Accrue2

10. Accounts Payable and Accrued Expenses (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Accounts Payable And Accrued Expenses Details	'	'
Accrued expenses	$3,101,103	$993,618
Accrued payroll and vacation	102,898	113,860
Interest payable	421,632	93,458
Deferred revenue	407,426	21,947
Other	1,194,755	556,088
Total accounts payable and accrued expenses	$11,161,550	$10,579,496

11_Notes_Payable_NonRelated_Pa1

11. Notes Payable - Non-Related Parties (Details) (NonRelatedParty, USD $)	Dec. 31, 2013	Dec. 31, 2012
NonRelatedParty	'	'
Senior Notes	$41,791,667	$16,500,000
Discount on senior notes	-4,377,680	-1,815,920
Total notes payable - non-related parties	37,413,987	14,684,080
Less: Current portion of Senior Notes	-625,000	-208,333
Non-current portion notes payable - non-related parties	$36,788,987	$14,475,747

11_Notes_Payable_Non_Related_P

11. Notes Payable - Non Related Parties (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Notes Payable - Non Related Parties Details Narrative	'	'
Monthly principal payment of Series A Notes	$52,083	'
Principal payments on Series A Notes	208,333	'
Accreted Discount on senior notes	1,493,552	1,815,920
Fair value derivative liability	1,664,292	1,066,000
Recognized gain (loss) on change of fair value	-598,292	799,500
Outstanding Advance accounts receivable	212,500	'
Amount paid of outstanding advance received	'	103,073
Amount repaid of letter of credit unsecured portion	'	$189,000

12_Equipment_Financing_Obligat1

12. Equipment Financing Obligations (Details Narrative) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Equipment Financing Obligations Details Narrative	'	'
Company's equipment financing obligations	$400,000	$200,000

13_Notes_Payable_Related_Party

13. Notes Payable - Related Party (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Non-current portion notes payable - related parties	$1,478,081	$4,492,136
RelatedParty	'	'
NBS Sellers Notes	85,714	600,000
Notes payable to Marvin Rosen	1,578,081	4,406,422
Other notes payable - related parties	125,000	125,000
Total notes payable - related parties	1,788,795	5,131,422
Less: Current portion of NBS Sellers Notes	-85,714	-514,286
Less: Current portion of notes payable to Marvin Rosen	-100,000	'
Less: Current portion of other notes payable	-125,000	-125,000
Non-current portion notes payable - related parties	$1,478,081	$4,492,136

13_Notes_Payable_Related_Party1

13. Notes Payable - Related Party (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Notes Payable - Related Party Details Narrative	'	'
Principal payments on Sellers Notes	$514,286	'
Loans from Marvin Rosen	'	236,000
Short-term unsecured advance from Mr. Rosen, outstanding amount	100,000	'
Convertible preferred Shares issued on conversion of New Rosen Notes	2,000	'
New Rosed notes converted into convertible preferred stock, amount	$2,000,000	'
Warrants to purchase common stock, shares	6,400,000	'
Warrants exercise price	$0.13	'

14_Equity_Transactions_Details

14. Equity Transactions (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summarizes the stock option activity	'	'	'
Outstanding Beginning Balance, Number of Options	'	6,634,261	'
Granted, Number of Options	'	2,511,500	'
Forfeitures, Number of Options	'	-147,291	'
Expirations, Number of Options	'	-134,209	'
Outstanding Ending Balance, Number of Options	'	'	6,634,261
Outstanding Beginning Balance, Weighted Average Exercise Price	'	$0.75	'
Granted, Weighted Average Exercise Price	'	$0.11	'
Forfeitures, Weighted Average Exercise Price	$0.11	$0.11	'
Cancelled or expired, Weighted Average Exercise Price	'	$0.21	'
Outstanding Ending Balance, Weighted Average Exercise Price	'	'	$0.75
Weighted Average Remaining Contractual Life (in years) Outstanding	'7 years 9 months 22 days	'6 years 11 months 5 days	'6 years 10 months 10 days
Weighted Average Remaining Contractual Life (in years) Exercisable	'5 years 1 month 13 days	'	'

14_Equity_Transactions_Details1

14. Equity Transactions (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Options Outstanding	17,570,760	'	'
Weighte Average Life (Years)	'7 years 9 months 22 days	'6 years 11 months 5 days	'6 years 10 months 10 days
Weighted Average Price	0.33	'	'
Options Exercisable	6,482,026	'	'
Option Exercisable, weighted average price	$0.73	'	'
$0.06-$0.10 [Member]	'	'	'
Options Outstanding	10,500,985	'	'
Weighte Average Life (Years)	'9 years 3 months 18 days	'	'
Weighted Average Price	0.08	'	'
Options Exercisable	990,751	'	'
Option Exercisable, weighted average price	$0.09	'	'
$0.11-$0.17 [Member]	'	'	'
Options Outstanding	4,450,375	'	'
Weighte Average Life (Years)	'7 years 3 months 18 days	'	'
Weighted Average Price	0.11	'	'
Options Exercisable	2,872,375	'	'
Option Exercisable, weighted average price	$0.11	'	'
$0.18-$0.31 [Member]	'	'	'
Options Outstanding	908,000	'	'
Weighte Average Life (Years)	'3 years 10 months 6 days	'	'
Weighted Average Price	0.31	'	'
Options Exercisable	907,500	'	'
Option Exercisable, weighted average price	$0.31	'	'
$0.39-$0.69 [Member]	'	'	'
Options Outstanding	642,000	'	'
Weighte Average Life (Years)	'3 years 3 months	'	'
Weighted Average Price	0.69	'	'
Options Exercisable	642,000	'	'
Option Exercisable, weighted average price	$0.69	'	'
$0.75-$2.28 [Member]	'	'	'
Options Outstanding	175,750	'	'
Weighte Average Life (Years)	'2 years 5 months 12 days	'	'
Weighted Average Price	2.28	'	'
Options Exercisable	175,750	'	'
Option Exercisable, weighted average price	$2.28	'	'
$2.46-$4.38 [Member]	'	'	'
Options Outstanding	841,150	'	'
Weighte Average Life (Years)	'1 year 3 months 29 days	'	'
Weighted Average Price	3.41	'	'
Options Exercisable	841,150	'	'
Option Exercisable, weighted average price	$3.41	'	'
$4.70-$6.45 [Member]	'	'	'
Options Outstanding	52,500	'	'
Weighte Average Life (Years)	'1 year 1 month 24 days	'	'
Weighted Average Price	6.2	'	'
Options Exercisable	52,500	'	'
Option Exercisable, weighted average price	$6.20	'	'

14_Equity_Transactions_Details2

14. Equity Transactions (Details2 ) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Outstanding Beginning Balance, Number of Warrants	89,974,479	47,615,186
Granted, Number of Warrants	117,691,970	43,827,454
Exercised, Number of Warrants	-6,875,289	'
Cancelled or expired, Number of Warrants	'	-1,468,161
Outstanding Ending Balance, Number of Warrants	200,791,160	89,974,479
Outstanding Beginning Balance, Weighted Average Exercise Price	$0.18	$0.25
Granted, Weighted Average Exercise Price	$0.10	$0.10
Exercised, Weighted Average Exercise Price	$0.28	'
Cancelled or expired, Weighted Average Exercise Price	'	$0.61
Outstanding Ending Balance, Weighted Average Exercise Price	$0.13	$0.18
Exercised, Warrants Per Share Exercise Price	'	'
Cancelled or expired, Warrants Per Share Exercise Price	'	'
Outstanding Ending Balance, Warrants Per Share Exercise Price	'	'
Minimum	'	'
Outstanding Beginning Balance, Warrants Per Share Exercise Price	$0.08	$0.08
Granted, Warrants Per Share Exercise Price	$0.01	$0.01
Exercised, Warrants Per Share Exercise Price	$0.14	'
Cancelled or expired, Warrants Per Share Exercise Price	'	$0.48
Outstanding Ending Balance, Warrants Per Share Exercise Price	'	$0.08
Maximum	'	'
Outstanding Beginning Balance, Warrants Per Share Exercise Price	$1.67	$1.67
Granted, Warrants Per Share Exercise Price	$0.17	$0.16
Exercised, Warrants Per Share Exercise Price	$0.46	'
Cancelled or expired, Warrants Per Share Exercise Price	'	$0.64
Outstanding Ending Balance, Warrants Per Share Exercise Price	'	$1.67

14_Equity_Transactions_Details3

14. Equity Transactions (Details Narrative ) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cumulative Convertible Preferred Stock issued to investors, shares	18,480	'
Cumulative Convertible Preferred Stock, par value	$0.01	'
Warrants to purchase common stock issued to investors	59,136,000	'
Derivative liability related to investor warrants	$6,000,000	'
Series B-1 Preferred Stock outstanding, shares	6,861.75	'
Series B-1 Preferred Stock convertible into common stock, shares	'	62,672,008
Series A-1, A-2 and A-4 Preferred Stock outstanding, Shares	5,045	5,045
Common stock issued to accredited investors, shares	50,257,163	10,762,718
Warrants to purchase common stock under subscription agreement	25,128,583	3,339,940
Consideration amount under subscription agreement	4,100,000	1,200,000
Common stock issued to third parties, shares	955,564	'
Common stock issued to third parties, amount	98,251	'
Common stock, shares authorized	550,000,000	550,000,000
Common stock, shares issued	303,833,242	178,250,533
Common stock, shares outstanding	303,833,242	178,250,533
Weighted-average estimated fair value of stock options granted	$0.07	$0.08
Unrecognized compensation cost related to stock options granted	675,000	'
Unrecognized compensation recognition weighted-average period	'2 years 4 months 20 days	'
Loss on extinguishment of debt	1,105,283	335,315
Executive Officer [Member]	'	'
Officer converted common stock, shares	1,177,965	'
Officer converted common stock, amount	102,500	'
Warrants issued to officer to purchase common stock	588,983	'
Director [Member]	'	'
Officer converted common stock, shares	76,237	'
Officer converted common stock, amount	$5,733	'
Warrants issued to officer to purchase common stock	38,119	'

15_Income_Taxes_Details

15. Income Taxes (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Deferred	'	'
Federal	($1,843,000)	($1,148,000)
State	'	'
Total	-1,843,000	-1,148,000
Current	'	'
Federal	'	'
State	51,887	'
Total	51,887	'
Change in valuation allowance	1,843,000	1,148,000
Total deferred benefit	$51,887	'

15_Income_Taxes_Details_1

15. Income Taxes (Details 1)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Taxes Details 1	'	'
Federal statutory rate	-34.00%	-34.00%
State net of federal tax	-2.90%	-3.90%
Other	1.60%	15.90%
Change in valuation allowance	36.30%	22.00%
Effective income tax rate	1.00%	'

15_Income_Taxes_Details_2

15. Income Taxes (Details 2) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Deferred tax assets	'	'
Net operating losses	$44,365,000	$44,144,000
Allowance for doubtful accounts	52,000	102,000
Derivative liability	1,728,000	405,000
Accrued liabilities and other	999,000	398,000
Intangible Assets	504,000	'
Property and equipment	337,000	120,000
Deferred Tax Assets, Gross	47,985,000	45,169,000
Deferred tax liability	'	'
Debt discount	1,664,000	690,000
Total	1,664,000	690,000
Deferred tax asset, net	46,321,000	44,479,000
Less valuation allowance	-46,321,000	-44,479,000
Total Deferred Tax Liabilities	'	'

15_Income_Taxes_Details_Narrat

15. Income Taxes (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Taxes Details Narrative	'	'
Net operating loss carry forwards	$132,700,000	$129,200,000
Expiry year	'2015 to 2033	'

16_Supplemental_Disclosure_of_2

16. Supplemental Disclosure of Cash Flow Information (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Supplemental Disclosure Of Cash Flow Information Details 1	'	'
Fair value of assets acquired	$34,139,636	$22,858,244
Cash paid	-32,108,450	-17,750,000
Debt issued	'	-600,000
Common stock issued	'	-1,250,000
Liabilities assumed	$2,031,186	$3,258,244

16_Supplemental_Disclosure_of_3

16. Supplemental Disclosure of Cash Flow Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Supplemental disclosure of cash flow information:	'	'
Cash paid for interest	$1,912,283	$355,887
Supplemental schedule of non-cash investing and financing activities:	'	'
Conversion of notes payable-related parties and accrued expenses to common stock	1,003,233	160,000
Transfer of restricted cash in satisfaction of accounts payable	274,048	274,048
Equipment financing obligation	359,675	232,066
Conversion of notes payable-related parties and accrued expenses to preferred stock	2,052,000	834,000
Preferred stock converted into common stock	$6,027,750	'

17_Commitments_and_Contingenci2

17. Commitments and Contingencies (Details) (USD $)	Dec. 31, 2013
Commitments And Contingencies Details	'
2014	$2,022,373
2015	1,640,064
2016	777,321
2017	544,822
2018 and thereafter	'
Total	$4,984,580

17_Commitments_and_Contingenci3

17. Commitments and Contingencies (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Commitments And Contingencies Details Narrative	'	'
Rent expense for all operating leases	$1,000,000	$1,000,000
Reflected insurance	248,000	'
Reflected revenue	109,000	'
Cost of sales revenue	$85,000	'

19_Concentrations_Details

19. Concentrations (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Concentrations Details	'	'
United States	$53,912,000	$37,750,000
Other	7,585,000	6,538,000
Total	$61,497,000	$44,288,000

19_Concentrations_Details_Narr

19. Concentrations (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Concentrations Details Narrative	'	'
Revenues consolidated for one customer in percentage	'10	'10
Revenues consolidated for two customer in percentage	'	'36.6
Consolidated accounts receivable percentage	'	'5
Carrier Services business segment	'	$150,000

21_Segment_Information_Details

21. Segment Information (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]	'	'
Revenues	$61,496,620	$44,287,509
Cost of revenues (exclusive of depreciation and amortization)	42,717,176	37,662,371
Gross profit	18,779,444	6,625,138
Depreciation and amortization	3,571,974	998,789
Selling, general and administrative expenses	18,756,325	10,438,967
Interest expense	-2,638,249	-623,460
Loss on extinguishment of debt	-1,105,283	-335,315
Loss on change in fair value of derivative liability	-598,292	799,500
Gain on extinguishment of accounts payable	2,883,660	'
Provision for income taxes	51,887	'
Net income (loss) from continuing operations	-5,081,903	-5,248,588
Total assets	68,950,661	27,068,427
Carrier Services	'	'
Segment Reporting Information [Line Items]	'	'
Revenues	31,122,771	37,457,674
Cost of revenues (exclusive of depreciation and amortization)	27,842,245	34,031,165
Gross profit	3,280,526	3,426,509
Depreciation and amortization	222,943	340,624
Selling, general and administrative expenses	3,070,678	3,299,648
Interest expense	'	'
Other (income) expenses	-180,948	-337,749
Gain on extinguishment of accounts payable	2,883,660	'
Provision for income taxes	'	'
Net income (loss) from continuing operations	2,689,617	-551,512
Capital expenditures	180,415	107,121
Total assets	3,021,463	2,235,099
Business Services And Other	'	'
Segment Reporting Information [Line Items]	'	'
Revenues	30,373,849	6,829,835
Cost of revenues (exclusive of depreciation and amortization)	14,874,931	3,631,206
Gross profit	15,498,918	3,198,629
Depreciation and amortization	3,261,932	571,493
Selling, general and administrative expenses	10,298,063	3,491,077
Interest expense	-2,300,237	-384,815
Other (income) expenses	104,548	26,197
Gain on extinguishment of accounts payable	'	'
Provision for income taxes	-26,887	'
Net income (loss) from continuing operations	-283,653	-1,222,559
Capital expenditures	1,111,386	272,922
Total assets	58,487,324	23,079,280
Corporate and Unallocated	'	'
Segment Reporting Information [Line Items]	'	'
Revenues	'	'
Cost of revenues (exclusive of depreciation and amortization)	'	'
Gross profit	'	'
Depreciation and amortization	87,099	86,672
Selling, general and administrative expenses	5,387,584	3,648,242
Interest expense	-338,012	-238,645
Loss on extinguishment of debt	-1,105,283	-335,315
Loss on change in fair value of derivative liability	-598,292	799,500
Other (income) expenses	53,403	34,857
Gain on extinguishment of accounts payable	'	'
Provision for income taxes	-25,000	'
Net income (loss) from continuing operations	-7,487,867	-3,474,517
Capital expenditures	15,548	18,933
Total assets	7,441,874	1,754,048
Consolidated	'	'
Segment Reporting Information [Line Items]	'	'
Revenues	61,496,620	44,287,509
Cost of revenues (exclusive of depreciation and amortization)	42,717,176	37,662,371
Gross profit	18,779,444	6,625,138
Depreciation and amortization	3,571,974	998,789
Selling, general and administrative expenses	18,756,325	10,438,967
Interest expense	-2,638,249	-623,460
Loss on extinguishment of debt	-1,105,283	-335,315
Loss on change in fair value of derivative liability	-598,292	799,500
Other (income) expenses	-22,997	-276,695
Gain on extinguishment of accounts payable	2,883,660	'
Provision for income taxes	-51,887	'
Net income (loss) from continuing operations	-5,081,903	-5,248,588
Capital expenditures	1,307,349	398,976
Total assets	$68,950,661	$27,068,427

22_Fair_Value_Disclosures_Deta

22. Fair Value Disclosures (Details) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Non-current liabilities:	'	'
Derivative liability	$10,515,472	$1,066,000
Level 2	'	'
Non-current liabilities:	'	'
Derivative liability	$10,515,472	$1,066,000

23_Related_Party_Transactions_

23. Related Party Transactions (Details Narrative) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Related Party Transactions Details Narrative	'	'
Related party payable	$226,000	$1,159,000
Accounts payable and accrued expenses	$0	$22,500