Fusion Connect (FSNN) 10-Q 19 Aug 14 2014 Q2 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 12, 2014
Document And Entity Information	'	'
Entity Registrant Name	'FUSION TELECOMMUNICATIONS INTERNATIONAL INC	'
Entity Central Index Key	'0001071411	'
Document Type	'10-Q	'
Document Period End Date	30-Jun-14	'
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	'	6,331,895
Document Fiscal Period Focus	'Q2	'
Document Fiscal Year Focus	'2014	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets:	'	'
Cash and cash equivalents	$9,786,329	$6,176,575
Accounts receivable, net of allowance for doubtful accounts of approximately $187,000 and $381,000, respectively	7,361,697	5,828,389
Prepaid expenses and other current assets	1,336,097	2,704,787
Total current assets	18,484,123	14,709,751
Property and equipment, net	11,793,189	11,193,355
Other assets:	'	'
Security deposits	596,073	585,083
Restricted cash	1,164,007	1,163,872
Goodwill	5,222,088	5,124,130
Intangible assets, net	31,705,263	35,048,818
Other assets	1,089,404	1,125,652
Total other assets	39,776,835	43,047,555
TOTAL ASSETS	70,054,147	68,950,661
Current liabilities:	'	'
Notes payable - non-related parties	2,027,724	625,000
Notes payable - related parties	125,000	310,714
Equipment financing obligations	202,805	245,138
Escrow payable	0	295,000
Accounts payable and accrued expenses	10,496,322	11,161,550
Related party payable	0	226,148
Current liabilities from discontinued operations	55,000	55,000
Total current liabilities	12,906,851	12,918,550
Long-term liabilities:	'	'
Notes payable - non-related parties, net of discount	36,511,327	36,788,987
Notes payable - related parties	1,267,114	1,478,081
Equipment financing obligations	123,711	167,614
Derivative liability	7,082,401	10,515,472
Deferred tax liabilities	147,341	0
Other long-term liabilities	57,442	131,627
Total liabilities	58,096,187	62,000,331
Stockholders' equity:	'	'
Preferred stock, $0.01 par value, 10,000,000 shares authorized, 27,883 and 23,525 shares issued and outstanding	279	235
Common stock, $0.01 par value, 18,000,000 shares authorized, 6,204,169 and 6,077,071 shares issued and outstanding	62,041	60,770
Capital in excess of par value	172,659,066	166,625,595
Accumulated deficit	-160,763,426	-159,736,270
Total stockholders' equity	11,957,960	6,950,330
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$70,054,147	$68,950,661

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets:	'	'
Allowance for doubtful accounts	$187,000	$381,000
Stockholders' equity:	'	'
Preferred Stock, Par Value	$0.01	$0.01
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	27,883	23,525
Preferred Stock, Shares Outstanding	27,883	23,525
Common Stock, Par Value	$0.01	$0.01
Common Stock, Shares Authorized	18,000,000	18,000,000
Common Stock, Shares Issued	6,204,169	6,077,071
Common Stock, Shares Outstanding	6,204,169	6,077,071

Condensed_Consolidated_Interim

Condensed Consolidated Interim Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]	'	'	'	'
Revenue	$23,140,973	$14,230,178	$46,045,802	$30,398,599
Cost of revenues, exclusive of depreciation and amortization, shown separately below	12,747,441	9,605,534	24,976,473	21,357,130
Gross profit	10,393,532	4,624,644	21,069,329	9,041,469
Depreciation and amortization	2,597,978	872,584	5,165,469	1,722,499
Selling general and administrative expenses (including stock-based compensation of approximately $73,000 and $28,000 for the three months ended June 31, 2014 and 2013, respectively, and approximately $142,000 and $56,000 for the six months ended June 30, 2014 and 2013, respectively)	7,825,494	4,433,848	15,644,891	8,701,446
Total operating expenses	10,423,472	5,306,432	20,810,360	10,423,945
Operating (loss) income	-29,940	-681,788	258,969	-1,382,476
Other (expenses) income:	'	'	'	'
Interest expense	-1,597,215	-669,731	-2,991,761	-1,329,250
Loss on extinguishment of debt	0	-92,376	0	-150,579
Change in fair value of derivative liability	-690,878	238,517	1,919,069	105,267
Other income (expenses), net	719	-17,731	-40,355	-62,351
Total other expenses	-2,287,374	-541,321	-1,113,047	-1,436,913
Gain on extinguishment of accounts payable	0	2,908,882	0	2,908,882
(Loss) income before income taxes	-2,317,314	1,685,773	-854,078	89,493
Provision for income taxes	151,583	0	173,078	0
Net (loss) income	-2,468,897	1,685,773	-1,027,156	89,493
Preferred stock dividends in arrears	-443,194	-100,349	-885,282	-199,595
Net (loss) income applicable to common stockholders:	($2,912,091)	$1,585,424	($1,912,438)	($110,102)
Basic (loss) earnings per common share:	($0.42)	$0.40	($0.28)	($0.03)
Diluted (loss) earnings per common share:	($0.42)	$0.30	($0.38)	($0.03)
Weighted average common shares outstanding:	'	'	'	'
Basic	6,876,617	3,917,341	6,842,532	3,746,326
Diluted	6,876,617	5,593,546	6,842,532	3,746,326

Condensed_Consolidated_Interim1

Condensed Consolidated Interim Statements of Operations (Unaudited) (Parenthetical) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]	'	'	'	'
Share Based Compensation	$73,000	$28,000	$142,000	$56,000

Condensed_Consolidated_Interim2

Condensed Consolidated Interim Statement Of Changes In Stockholders' Equity (Unaudited) (USD $)	Preferred Stock	Common Stock	Capital in Excess of Par	Accumulated Deficit	Total
Begining Balance, Amount at Dec. 31, 2013	$235	$60,770	$166,625,595	($159,736,270)	$6,950,330
Begining Balance, Shares at Dec. 31, 2013	23,525	6,077,071	'	'	'
Discount on related party note payable	'	'	372,551	'	372,551
Shares issued from the sale of preferred stock and warrants, net of expenses, Shares	4,358	'	'	'	'
Proceeds from the sale of preferred stock and warrants, net of expenses, Amount	44	'	3,984,382	'	3,984,426
Warrants issued in conjunction with the issuance of preferred stock deemed not indexed to the Company's common stock	'	'	-1,301,607	'	-1,301,607
Issuance of common stock for services rendered, Shares	'	4,265	'	'	'
Issuance of common stock for services rendered, Amount	'	43	21,624	'	21,667
Modification of previously issued warrants and reclassification to stockholders' equity	'	'	2,815,609	'	2,815,609
Net loss	'	'	'	-1,027,156	-1,027,156
Dividends on preferred stock, Shares	'	122,833	'	'	'
Dividends on preferred stock, Amount	'	1,228	-1,228	'	'
Stock based compensation associated with stock incentive plans	'	'	142,140	'	142,140
Ending Balance, Amount at Jun. 30, 2014	$279	$62,041	$172,659,066	($160,763,426)	$11,957,960
Ending Balance, Shares at Jun. 30, 2014	27,883	6,204,169	'	'	'

Condensed_Consolidated_Interim3

Condensed Consolidated Interim Statements of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:	'	'
Net (loss) income	($1,027,156)	$89,493
Adjustments to reconcile net income ( loss) to net cash used in operating activities:	'	'
Depreciation and amortization	5,165,469	1,722,499
Loss on disposal of property and equipment	84,373	0
Loss on sale of accounts receivable	94,037	128,769
Deferred income tax provision	147,341	0
Bad debt expense	222,856	1,251
Stock-based compensation	142,140	55,931
Stock and warrants issued for services rendered or in settlement of liabilities	37,542	83,564
Amortization of debt discount and deferred financing fees	579,541	209,011
Change in fair value of derivative liability	-1,919,069	-105,267
Loss on extinguishment of debt	0	150,579
Gain on extinguishment of accounts payable	0	-2,908,882
Increase (decrease) in cash and cash equivalents attributable to changes in operating assets and liabilities:	'	'
Accounts receivable	-1,004,835	-992,929
Prepaid expenses and other current assets	-862,851	-75,670
Other assets	-46,870	25,894
Replenishment of security deposit	0	-144,141
Accounts payable and accrued expenses	-1,446,993	1,430,459
Other long-term liabilities	-74,186	-67,645
Net cash provided by (used) in operating activities	91,339	-397,084
Cash flows from investing activities:	'	'
Purchase of property and equipment	-1,817,707	-628,607
Proceeds from sale of property and equipment	46,116	0
Payment of obligations related to purchase price of acquisitions	-226,148	-159,360
Returns of security deposits	2,000,000	0
Payments of security deposits	-10,990	0
Change in restricted cash	-136	-197
Net cash used in investing activities	-8,865	-788,164
Cash flows from financing activities:	'	'
Proceeds from the sale of common stock and warrants, net	0	1,559,509
Proceeds from the sale of preferred stock and warrants, net	3,984,426	0
Proceeds from notes payable - related parties	0	100,000
Proceeds from notes payable - non-related parties	1,102,724	212,500
Payments on equipment financing obligations	-173,832	-5,352
Repayments of notes payable - related parties	-185,714	-257,143
Repayments of notes payable - non-related parties	-1,200,324	-180,577
Net cash provided by financing activities	3,527,280	1,428,937
Net change in cash and cash equivalents:	3,609,754	243,689
Cash and cash equivalents, beginning of period	6,176,575	543,214
Cash and cash equivalents, end of period	$9,786,329	$786,903

1_Basis_of_Presentation_Consol

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies	'
	The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for Fusion Telecommunications International, Inc. (“Fusion”) and its subsidiaries (collectively, the “Company”).  These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”) and therefore omit or condense certain footnotes and other information normally included in consolidated interim financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).  All material intercompany balances and transactions have been eliminated in consolidation.  In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the condensed consolidated interim financial statements have been made. The results of operations for an interim period are not necessarily indicative of the results for the entire year.
	During the three and six months ended June 30, 2014 and 2013, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying condensed consolidated interim statements of operations.  In addition, certain prior year balances have been reclassified to conform to the current presentation.
	Reverse split of common stock
	On April 9, 2014, the Company’s Board of Directors approved amendments to the Company’s Certificate of Incorporation to (a) effect a reverse stock split of all of the outstanding shares of the Company’s common stock at a ratio (the “Reverse Split Ratio”) of one for fifty (the “Reverse Stock Split”) and (b) a corresponding reduction in the number of shares of common stock that the Company is authorized to issue from 900,000,000 to 18,000,000.  The Certificate of Amendment, which was approved by the Company’s stockholders on March 28, 2014, became effective on May 13, 2014, and at that time the Reverse Stock Split took place and each 50 shares of outstanding common stock of the Company was combined and automatically converted into one share of the Company’s common stock, with a par value of $0.01 per share.  In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants and options to purchase common stock were proportionately adjusted at the Reverse Split Ratio consistent with the terms of such instruments.  No fractional shares were issued as a result of the Reverse Stock Split, and any fractional share to which a stockholder may have been entitled as a result of the Reverse Stock Split was rounded up to the nearest whole share.
	As a result of the Reverse Stock Split, all share and per share amounts as of December 31, 2013, as well as for the three and six months ended June 30, 2013, have been restated at the Reverse Split Ratio to give effect to the Reverse Stock Split.
	Income taxes
	The Company complies with accounting and reporting requirements with respect to accounting for income taxes, which require an asset and liability approach to financial accounting and reporting for income taxes.  Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized.
	In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement.  Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets.  Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2014 and December 31, 2013.  The Company is subject to income tax examinations by major taxing authorities for all tax years since 2010 and its tax returns 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 June 30, 2014 and December 31, 2013.  During the three and six month periods ended June 30, 2014 and 2013, the Company recognized no adjustments for uncertain tax positions.
	Earnings per share
	Basic earnings per share excludes dilution and is computed by dividing earnings attributable to common stockholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, or resulted in the issuance of common stock that then shared in the income of the Company.  For the six months ended June 30, 2014, the diluted loss per share computation reflects a decrease in the loss attributable to common stockholders of approximately $688,000 for the gain on fair value of the Company’s derivative liability that was attributable to outstanding in-the-money warrants (see note 6).
	For the three months ended June 30, 2013, the computation of diluted earnings per share was as follows:
	Numerator:
	Income available to common stockholders		$	1,585,424
	Dividends on Series A-1, A-2 and A-4 Convertible Preferred Stock			100,349
			$	1,685,773
	Denominator:
	Weighted-average shares outstanding - basic			3,917,341
	Dilutive effect of employee stock options			192
	Dilutive effect of common stock purchase warrants			271,042
	Dilutive effect of Convertible Preferred Stock			1,404,971
	Weighted-average shares outstanding - diluted			5,593,546
	For the six months ended June 30, 2014 and 2013, the following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:
			2014				2013
	Warrants			3,565,583				1,980,542
	Stock options			386,333				174,457
	Convertible preferred stock			4,726,572				1,404,971
				8,678,488				3,559,970
	The net loss per common share calculation includes a provision for preferred stock dividends on the Company’s outstanding Series A-1, A-2 and A-4 Preferred Stock (the “Series A Preferred Stock”) of approximately $100,000 for the three months ended June 30, 2014 and 2013, and approximately $200,000 for the six months ended June 30, 2014 and 2013.  As of June 30, 2014, the Board of Directors had not declared any dividends on the Company’s Series A Preferred Stock, and the Company had accumulated approximately $3,730,000 of preferred stock dividends.  The Board of Directors has declared dividends for the three and six months ended June 30, 2014 of $342,570 and $685,140, respectively, in connection with the Company’s Series B-2 Preferred Stock which, in accordance with the terms of the Series B-2 Preferred Stock, was paid in the form of 56,506 and 122,833 shares, respectively, of the Company’s common stock.
	Sale of accounts receivable
	The Company has an agreement to sell certain of its accounts receivable under an arrangement with a third party.  The Company records a loss on sale of accounts receivable at the time the receivables are sold for the difference between the book value of the receivables transferred and their respective purchase price.  During the year ended December 31, 2013, the Company accounted for the sales of its accounts receivable as sales of financial assets and derecognized them from its consolidated balance sheet as of the date of sale. In connection with the preparation of its June 30, 2014 consolidated financial statements, the Company determined that although the rights, title and interest of these receivables belong to the transferee, these transfers do not meet all of the criteria outlined in Accounting Standards Codification Topic (“ASC”) 860, Transfers and Servicing.  The Company had derecognized $0.9 million of such receivables as of December 31, 2013, and the Company believes this difference was not material to its consolidated balance sheet as of that date.  At June 30, 2014 the Company recorded accounts receivable and recognized a note payable to unrelated parties in the amount of $1.1 million (see note 6) for the amount of uncollected receivables that had been transferred.
	The Company recognized losses on the sale of accounts receivable in the three and six months ended June 30, 2014 of approximately $53,000 and $94,000, respectively.  For the three and six months ended June 30, 2013, the Company recognized losses on the sale of accounts receivable of approximately $45,000 and $129,000, respectively.  These amounts are recorded in Other income (expenses) in the accompanying consolidated statements of operations.  The Company’s obligations to the purchaser of the receivables under the agreement are secured by a first priority lien on the accounts receivable of the Company’s Carrier Services business segment, and by a subordinated security interest on the other assets of the Company’s Carrier Services business segment.  Based on the Company’s evaluation of the creditworthiness of the customers whose receivables the Company sells under this arrangement, the Company does not believe that there is any significant credit risk related to those receivables.
	Goodwill
	Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired, and consists of $2.6 million of goodwill recognized in the acquisition of Network Billing Systems, LLC (“NBS”) on October 29, 2012, with the remainder resulting from the Broadvox Transaction described more fully in note 2.  Goodwill at June 30, 2014 and December 31, 2013 was approximately $5.2 million and $5.1 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 six months ended June 30, 2014.  There was no change in goodwill during the six months ended June 30, 2013:
	Balance at				Additions				Other (a)		Balance at
	1-Jan-14										30-Jun-14
	$	5,124,130				-				97,958	$	5,222,088
	(a) - Amount relates to adjustments to the preliminary purchase price for acquisitions completed on December 31, 2013.
	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 six months ended June 30, 2014 and 2013.
	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.
	Stock–based compensation
	The Company accounts for stock-based compensation by recognizing the fair value of the compensation cost for all stock awards over their respective service periods, which are generally equal to the vesting period.  This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the date of grant using the Black-Scholes option-pricing model.  An offsetting increase to stockholders' equity is recorded equal to the amount of the compensation expense charge.
	Stock-based compensation expense recognized in the condensed consolidated interim statements of operations for the three and six month ended June 30, 2014 and 2013 includes compensation expense for stock-based payment awards granted prior to June 30, 2014 but not yet vested, based on the estimated grant date fair value.  As stock-based compensation expense recognized in the condensed consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. When estimating forfeitures, the Company considers historical forfeiture rates as well as ongoing trends for actual option forfeiture.
	The impact of stock-based compensation expense on the Company’s results of operations for the three and six months ended June 30, 2014 was approximately $73,000 and $142,000, respectively.  Stock-based compensation expense for the three and six months ended June 30, 2013 was approximately $28,000 and $56,000, respectively.  These amounts are included in selling, general, and administrative expenses in the condensed consolidated interim statements of operations.
	The following table summarizes the stock option activity for the six months ended June 30, 2014:
	(unaudited)
			Number of				Weighted Average Exercise Price
			Options
	Balance at December 31, 2013			351,464			$	16.29
	Shares granted during the period			37,450			$	6.67
	Shares exercised during the period			-			$	-
	Shares forfeited during the period			(1,996	)		$	6.23
	Shares expired during the period			(585	)		$	9.72
	Shares outstanding at June 30, 2014			386,333			$	15.42
	Shares exercisable at June 30, 2014			130,460			$	36.31
	The Company calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model method with the following assumptions:
			(unaudited)
			Six Months Ended June 30,
			2014				2013
	Dividend yield			0	%			0	%
	Stock volatility			137.2	%			137.2	%
	Average Risk-free interest rate			2.34	%			0.52	%
	Average option term (years)			8.08				4
As of June 30, 2014, there was approximately $647,000 of total unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under the Company’s Stock Incentive Plans, which is expected to be recognized over a weighted-average period of 2.14 years.
Advertising and marketing
Advertising and marketing expense includes cost for promotional materials and trade show expenses for the marketing of the Company’s business products and services. Advertising and marketing expenses were approximately $33,000 and $6,000 for the three months ended June 30, 2014 and 2013, and approximately $77,000 and $15,000 for the six months ended June 30, 2014 and 2013, respectively.
Fair value of financial instruments
The carrying amounts of the Company’s assets and liabilities approximate the fair value presented in the accompanying Condensed Consolidated Balance Sheets, due to their short-term maturities.
Use of estimates
The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the periods.  Actual results could be affected by the accuracy of those estimates.
Restricted cash
Restricted cash at June 30, 2014 and December 31, 2013 includes $1,000,000 of cash held in reserve as required by the terms of the Company’s senior lending agreement (see note 6), and certificates of deposit collateralizing a letter of credit in the aggregate amount of approximately $164,000.  The letter of credit is required as security for one of the Company’s non-cancelable operating leases for office facilities.

2_Acquisition

2. Acquisition	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
2. 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, in the operation of their cloud services business (the “Broadvox Transaction”). The purchase price for the assets acquired in the Broadvox Transaction was $32.1 million in cash, plus a working capital adjustment paid to the sellers in accordance with the terms of the purchase agreement of approximately $0.2 million. Had the transaction taken place on January 1, 2013, the Company’s consolidated revenues and net loss for the six months ended June 30, 2013 would have been approximately $46.2 million and $3.0 million, respectively.

3_Prepaid_Expenses_and_Other_C

3. Prepaid Expenses and Other Current Assets	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
3. Prepaid Expenses and Other Current Assets	'
	Prepaid expenses and other current assets consist of the following at June 30, 2014 and December 31, 2013:
		30-Jun-14	31-Dec-13
		(unaudited)
	Prepaid insurance	$                      163,504	$                     63,737
	Due from purchaser of accounts receivable	278,691	236,232
	Escrowed funds – senior lenders	-	2,000,000
	Other prepaid expenses	893,902	404,818
	Total	$                   1,336,097	$                2,704,787

4_Intangible_Assets

4. Intangible Assets	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
4. Intangible Assets	'
	Identifiable intangible assets as of June 30, 2014 and December 31, 2013 are comprised of:
				June 30, 2014			31-Dec-13
				Gross Carrying Amount	Accumulated Amortization	Total	Gross Carrying Amount	Accumulated Amortization	Total
	Intangibles associated with the acquisition of NBS:
		Trademarks and tradename		$          563,000	$        (93,833)	$        469,167	$            563,000	$        (65,683)	$        497,317
		Proprietary technology		1,903,000	(634,333)	1,268,667	1,903,000	(444,033)	1,458,967
		Non-compete agreement		3,257,000	(1,809,444)	1,447,556	3,257,000	(1,266,611)	1,990,389
		Customer relationships		9,824,000	(1,078,487)	8,745,513	9,824,000	(754,988)	9,069,012
		Favorable lease intangible		218,000	(72,667)	145,333	218,000	(50,867)	167,133
		Total acquired intangibles		15,765,000	(3,688,764)	12,076,236	15,765,000	(2,582,182)	13,182,818
	Intangibles associated with the Broadvox Transaction:
		Proprietary technology		3,878,000	(387,800)	3,490,200	3,878,000	-	3,878,000
		Non-compete agreements		5,471,000	(1,367,750)	4,103,250	5,471,000	-	5,471,000
		Customer relationships		12,517,000	(481,423)	12,035,577	12,517,000	-	12,517,000
		Total acquired intangibles		21,866,000	(2,236,973)	19,629,027	21,866,000	-	21,866,000
		Total		$     37,631,000	$   (5,925,737)	$   31,705,263	$       37,631,000	$   (2,582,182)	$   35,048,818
	Amortization expense for the three and six months ended June 30, 2014 was $1.7 million and $3.3 million, respectively. Amortization expense for the three and six months ended June 30, 2013 was $0.6 million and $1.1 million, respectively. Estimated future aggregate amortization expense is as follows for the periods indicated:
					($000's)
	Remainder of the year		2014		$          3,343
	Year ending December 31:		2015		6,505
			2016		2,865
			2017		2,795
			2018		2,441

5_Accounts_Payable_and_Accrued

5. Accounts Payable and Accrued Expenses	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
5. Accounts Payable and Accrued Expenses	'
	Accounts payable and accrued expenses conist of the following at June 30, 2014 and December 31, 2013:
		June 30,		December 31,
		2014		2013
		(unaudited)
	Trade accounts payable	$	4,621,081	$	5,933,736
	Accrued expenses		1,452,369		3,101,103
	Accrued payroll and vacation		259,623		102,898
	Interest payable		84,492		421,632
	Sales and communications taxes payable		1,762,549		691,350
	Deferred revenue		805,377		407,426
	Other		1,510,831		503,405
	Total accounts payable and accrued expenses	$	10,496,322	$	11,161,550

6_Notes_Payable_NonRelated_Par

6. Notes Payable Non-Related Parties	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
6. Notes Payable - Non-Related Parties	'
	At June 30, 2014 and December 31, 2013, notes payable – non-related parties are comprised of the following:
				30-Jun-14	31-Dec-13
	Senior Notes			$                 41,479,167	$              41,791,667
	Discount on Senior Notes			(4,042,840)	(4,377,680)
	Other notes payable			1,102,724	-
	Total notes payable - non-related parties			38,539,051	37,413,987
	Less:
		Current portion		(2,027,724)	(625,000)
	Non-current portion notes payable - non-related parties			$                 36,511,327	$              36,788,987
	Senior Notes
	On October 29, 2012, the Company and its wholly owned subsidiary, Fusion NBS Acquisition Corp. (“FNAC”) entered into a Securities Purchase Agreement and Security Agreement (the “Purchase Agreement”) with Praesidian Capital Opportunity Fund III, LP, Praesidian Capital Opportunity Fund III-A, LP and Plexus Fund II, LP (the “Lenders”). Under the Purchase Agreement, 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.
	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 in connection with the Broadvox Transaction (see note 2). On December 31, 2013, the Purchase Agreement was amended and restated (the “SPA”) 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 sale of the Series D Notes were used to finance the Broadvox Transaction. Under the terms of the SPA:
		·	Plexus Fund III, L.P., Plexus Fund QP III, L.P. and United Insurance Company of America became parties to the SPA and to certain ancillary agreements that were entered into with the Lenders at the time of the Purchase Agreement.
		·	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 (i) any amounts outstanding under a permitted working capital line of credit, and (ii) any and all cash balances held by the Company’s Business Services business segment. 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. As of and for the six months ended June 30, 2014, the Company was in compliance with all of the financial covenants contained in the SPA.
	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 sale of the Senior Notes to the Senior Lenders, the Company issued nominal warrants to the Senior Lenders to purchase an aggregate of 728,333 shares of the Company’s common stock (the “Lenders’ Warrants”). The Lenders’ Warrants are exercisable from the date of issuance at an exercise price of $0.50 per share, with 266,501 warrants expiring on October 29, 2022, and the remainder expiring on December 31, 2023. The Company is required to pay the exercise price on behalf of the Senior Lenders at the time of exercise. The Company has recorded a discount on the Senior Notes based on the fair value of the Lenders’ Warrants as of the date of issuance. The discount is being accreted over the life of the Senior Notes, and was $4.0 million and $4.4 million as of June 30, 2014 and December 31, 2013, respectively.
	Commencing upon the earlier of a change in control, the repayment of the Senior Notes in full or the five year anniversary of the issuance of the Lenders’ Warrants, 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 Senior Lenders have the right to require the Company to repurchase the shares issued or issuable upon exercise of the Lenders’ Warrants at a repurchase price based upon the formulas set forth therein. As a result, the Lenders’ Warrants do not meet the criteria for equity classification under ASC Topic 480, Distinguishing Liabilities From Equity (“ASC 480”), and are not considered to be indexed to the Company’s own stock under the guidance provided in ASC 815, and the Company recognized derivative liabilities aggregating $4.7 million upon the issuance of the Lenders' Warrants. At June 30, 2014 and December 31, 2013, the fair value of these derivative liabilities was $3.9 million and $4.5 million, respectively. The Company recognized a loss on the change in fair value of this derivative in the amount of $0.2 million for the three months ended June 30, 2014, and gain on the change in fair value of $0.7 million for the six months ending June 30, 2014. For the three and six months ended June 30, 2013, the Company recognized a gain on the change in fair value this derivative in the amount of $0.2 million and $0.1 million, respectively.
	Expenses incurred in connection with the Purchase Agreement and SPA and the sale of the Senior Notes are reflected in Other assets on the Company’s consolidated balance sheet in the amount of $1.0 million and $1.1 million at June 30, 2014 and December 31, 2013, respectively, and are being amortized as interest expense over the life of the Senior Notes.
	Other Notes Payable
	As more fully described in note 1, from time to time the Company sells certain of its accounts receivable to an unrelated party at a discount. At June 30, 2014, $1.1 million of the receivables that were sold had yet to be collected by the transferee. All of these receivables were collected by the transferee subsequent to June 30, 2014, satisfying this obligation.

7_Notes_PayableRelated_Parties

7. Notes Payable-Related Parties	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
7. Notes Payable-Related Parties	'
	At June 30, 2014 and December 31, 2013, notes payable – related parties are comprised of the following:
			30-Jun-14	31-Dec-13
	NBS Sellers Notes		$                               -	$                       85,714
	Notes payable to Marvin Rosen		1,478,081	1,578,081
	Discount on notes payable to Marvin Rosen		(210,967)
	Other notes payable - related parties		125,000	125,000
	Total notes payable - related parties		1,392,114	1,788,795
	Less:
		Current portion of NBS Sellers Notes	-	(85,714)
		Current portion of notes payable to Marvin Rosen	-	(100,000)
		Current portion of other notes payable - related parties	(125,000)	(125,000)
	Non-current portion notes payable - related parties		$                   1,267,114	$                  1,478,081
	Sellers Notes
	As part of the purchase price of NBS, FNAC issued promissory notes (the “Sellers Notes”) to Jonathan Kaufman and entities affiliated with Mr. Kaufman, the sellers of NBS, in the aggregate principal amount of $600,000. Upon the closing of the acquisition of NBS, Mr. Kaufman became President of the Company’s Business Services division and an executive officer of the Company. The Sellers Notes were paid in full as of June 30, 2014.
	Notes Payable to Marvin Rosen
	In conjunction with the Company’s sale of the Series A Notes and Series B Notes to the Lenders, Marvin Rosen, the Company’s Chairman of the Board of Directors, entered into an Intercreditor and Subordination Agreement with the Company and the Lenders, as amended, 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 Senior Lenders. In connection with this agreement, on October 25, 2012 Mr. Rosen agreed to consolidate the principal amount of all his then outstanding promissory notes aggregating to $3.9 million 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 $0.5 million, and the Company also agreed to pay Mr. Rosen 7% annual interest on this amount (collectively, with the New Rosen Note, the “Subordinated Obligations”). The Company has since determined that the 7% interest rate on the Subordinated Obligations requires the Company to impute additional interest expense. As a result, during the six months ended June 30, 2014, the Company recognized a discount on the Subordinated Obligations in the approximate amount of $0.4 million, which reflects a 12% effective interest rate, and gives effect to the pro rata reductions to the discount resulting from Mr. Rosen’s partial exchanges of the New Rosen Note into shares of the Company’s common stock during the year ended December 31, 2013. During the three and six months ended June 30, 2014, the Company recognized interest expense of approximately $0.2 million to amortize the discount on the Subordinated Obligations, and the net unamortized discount as of June 30, 2014 is $0.2 million. The Company has determined that the forgoing items are not material to the Company’s consolidated financial statements as of and for the years ended December 31, 2013 and 2012.
	On March 1, 2013, the Company received a short-term unsecured advance from Mr. Rosen in the amount of $100,000. The Senior Lenders had approved the repayment of this advance from the proceeds from certain future sales of the Company’s equity securities. The advance was repaid during the six months ended June 30, 2014.

8_Equity_Transactions

8. Equity Transactions	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
8. Equity Transactions	'
	On January 24, 2014, the Company accepted subscriptions from and issued to a total of 40 accredited investors (the “Investors”) an aggregate of 4,358 shares of its Series B-2 Preferred Stock and warrants (the “Investor Warrants”) to purchase 278,912 shares (the “Warrant Shares”) of the Company’s common stock and received gross cash proceeds of $4,358,000.  The proceeds, net of transaction expenses, are being used 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 $5.00 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, including the Series B-2 Preferred Stock issued on December 31, 2013, is convertible into an aggregate of 4,567,600 shares of the Company’s common stock (the “Conversion Shares”).
	The Investor Warrants became exercisable on March 28, 2014 and may be exercised at any time until January 24, 2019 for a number of Warrant Shares that is equal to 40% of the Stated Value divided by 125% of the Preferred Conversion Price, as adjusted for stock splits, combinations and reclassifications (the “Investor Warrant Exercise Price”).
	The Company also agreed to register the resale of the Conversion Shares and the Investor Warrant Shares, and to use its reasonable commercial efforts to cause the registration statement to remain effective until the date that all of the Conversion Shares and Warrant Shares have been sold or may be sold pursuant to Rule 144 under the Securities Act of 1933, as determined by the Company. The Company may be required to pay the Investors, as liquidated damages and not as a penalty, an amount equal to one percent (1%) of the aggregate amount invested by such Investor for each 30-day period or pro rata portion thereof during which the registration statement is not available to permit re-sales by the Investors; provided, that the maximum payment to each Investor shall not exceed six percent (6%) of the aggregate amount invested by such Investor. The Company filed the registration statement on May 2, 2014, and the registration statement became effective on July 21, 2014.
	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 $12.50 for ten consecutive trading days. In addition, shares of Series B-2 Preferred Stock bear a cumulative six percent (6%) annual dividend payable quarterly in arrears, in cash or shares of common stock, at the option of the Company (see note 1, “Earnings per Share”).
	Holders of Series B-2 Preferred Stock have liquidation rights that are senior to that of holders of the Company’s outstanding Series A-1, A-2 and A-4 Preferred Stock, 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). However, holders of common stock will be entitled to vote as a 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 broker-dealers. The Company paid aggregate cash compensation to the broker-dealers of $0.4 million, and issued warrants to the broker-dealers or their respective designees to purchase 45,050 shares of the Company’s common stock.
	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 $1.3 million at the date of issuance for the fair value of the Investor Warrants based on a Black-Scholes valuation. During the six months ended June 30, 2014, a portion of the holders of the Investor Warrants executed agreements to modify the terms of the Investor Warrants to remove the provisions related to the downward adjustment of the exercise price. The Company concluded that the amended terms for these Investor Warrants were such that they qualified for equity treatment under ASC Topic 815. As a result, the Company reclassified $2.8 million from the derivative liability related to the Investor Warrants into equity. Including the Investor Warrants issued in connection with the issuance of Series B-2 Preferred Stock on December 31, 2013, the fair value of the derivative liability related to the Investor Warrants not qualifying for equity treatment was $3.2 million and $6.0 million at June 30, 2014 and December 31, 2013, respectively. The Company recognized a loss on the change in fair value of this derivative liability of $0.5 million for the three months ended June 30, 2014, and a gain on the change in fair value of $1.2 million for the six months ended June 30, 2014.
	On April 30, 2014, as more fully described in note 1, the Company filed an amendment to its Certificate of Incorporation to (a) effectuate the Reverse Stock Split and (b) reduce the number of shares of common stock that are authorized for issuance to 18,000,000. The Reverse Stock Split became effective on May 13, 2014.

9_Recently_Adopted_and_Issued_

9. Recently Adopted and Issued Accounting Pronouncements	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
9. Recently Adopted and Issued Accounting Pronouncements	'
	During the six months ended June 30, 2014, there were no new accounting pronouncements adopted by the Company that had a material impact on the Company’s consolidated financial statements. In May of 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers,” (“ASU 2014-09”). ASU 2014-09 outlines a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. ASU 2014-09 is effective for annual and interim reporting periods beginning after December 15, 2016 and early adoption is not permitted. Companies may either use a full retrospective or modified retrospective approach to adopt this new standard. The Company is currently evaluating both adoption options and the impact that adoption of ASU 2014-09 will have on its consolidated financial statements.

10_Commitments_and_Contingenci

10. Commitments and Contingencies	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
10. Commitments and Contingencies	'
	Legal matters
	The Company is from time to time involved in claims and legal actions arising in the ordinary course of business. Management does not expect that the outcome of any such claims or actions will have a material effect on the Company’s operations or financial condition. In addition, due to the regulatory nature of the telecommunications industry, the Company periodically receives and responds to various inquiries from state and federal regulatory agencies. Management does not expect the outcome of any such regulatory inquiries to have a material impact on the Company’s liquidity, results of operations or financial condition.

11_Segment_Information

11. Segment Information	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
11. 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 related to the assets acquired in the Broadvox Transaction effective as of January 1, 2014.
	Operating segment information for the three and six months ended June 30, 2014 and 2013 is summarized as follows:
	Three  months ended June 30, 2014
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$          7,510,875	$         15,630,098	$                  -	$    23,140,973
	Cost of revenues (exclusive of
		depreciation and amortization)	6,714,319	6,033,122	-	12,747,441
	Gross profit		796,556	9,596,976	-	10,393,532
	Depreciation and amortization		53,503	2,522,472	22,003	2,597,978
	Selling, general and administrative expenses		725,383	5,878,297	1,221,814	7,825,494
	Interest expense		-	(1,400,275)	(196,940)	(1,597,215)
	Loss on change in fair value of derivative liability				(690,878)	(690,878)
	Other (expenses) income		(52,997)	(25,556)	79,272	719
	Provision for income taxes		-	-	151,583	151,583
	Net loss		$             (35,327)	$            (229,624)	$    (2,203,946)	$    (2,468,897)
	Total assets		$          5,040,316	$         58,293,657	$     6,720,174	$    70,054,147
	Six months ended June 30, 2014
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$        14,673,371	$         31,372,431	$                  -	$    46,045,802
	Cost of revenues (exclusive of
		depreciation and amortization)	13,033,057	11,943,416	-	24,976,473
	Gross profit		1,640,314	19,429,015	-	21,069,329
	Depreciation and amortization		116,198	5,005,102	44,169	5,165,469
	Selling, general and administrative expenses		1,441,232	11,840,301	2,363,358	15,644,891
	Interest expense		-	(2,754,067)	(237,694)	(2,991,761)
	Gain on change in fair value of derivative liability				1,919,069	1,919,069
	Other (expenses) income		(94,037)	(26,656)	80,338	(40,355)
	Provision for income taxes		-	-	173,078	173,078
	Net loss		$             (11,153)	$            (197,111)	$       (818,892)	$       (1,027,156)
	Capital expenditures		$               56,995	$           1,760,712	$                  -	$      1,817,707
	Three Months Ending June 30, 2013
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$          6,738,527	$           7,491,651	$                  -	$    14,230,178
	Cost of revenues (exclusive of
		depreciation and amortization)	5,938,937	3,666,597	-	9,605,534
	Gross profit		799,590	3,825,054	-	4,624,644
	Depreciation and amortization		48,219	803,006	21,359	872,584
	Selling, general and administrative expenses		748,757	2,600,306	1,084,785	4,433,848
	Interest expense		-	(583,344)	(86,387)	(669,731)
	Loss on extinguishment of debt				(92,376)	(92,376)
	Gain on change in fair value of derivative liability				238,517	238,517
	Other (expenses) income		(43,747)	28,107	(2,091)	(17,731)
	Gain on extinguishment of accounts payable			-	2,908,882	2,908,882
	Provision for income taxes		-			-
	Net (loss) income		$             (41,133)	$            (133,495)	$     1,860,401	$      1,685,773
	Total assets		$          3,332,067	$         23,091,098	$        897,682	$    27,320,847
	Six Months Ended June 30, 2013
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$        15,431,815	$         14,966,784	$                  -	$    30,398,599
	Cost of revenues (exclusive of
		depreciation and amortization)	13,920,474	7,436,656	-	21,357,130
	Gross profit		1,511,341	7,530,128	-	9,041,469
	Depreciation and amortization		96,432	1,583,422	42,645	1,722,499
	Selling, general and administrative expenses		1,617,952	5,051,717	2,031,777	8,701,446
	Interest expense		-	(1,148,822)	(180,428)	(1,329,250)
	Loss on extinguishment of debt				(150,579)	(150,579)
	Gain on change in fair value of derivative liability				105,267	105,267
	Other (expenses) income		(127,231)	38,711	26,169	(62,351)
Gain on extinguishment of accounts payable			-	2,908,882	2,908,882
Net (loss) income		$           (330,274)	$            (215,122)	$        634,889	$           89,493
Capital expenditures		$               49,768	$              561,342	$          17,497	$         628,607
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.

12_Supplemental_Disclosure_of_

12. Supplemental Disclosure of Cash Flow Information	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
12. Supplemental Disclosure of Cash Flow Information	'
		Six months ended June 30,
		2014	2013
	Cash paid for interest	$         2,749,360	$            931,380
	Cash paid for income taxes	$              21,495	$                     -
	Supplemental schedule of non-cash financing and investing activities:
	Conversion of notes and interest payable - related parties to common stock	$                      -	$            345,000
	Conversion of accounts payable - related parties to common stock	$                      -	$                2,500
	Assets acquired under capital leases	$              49,090	$            121,834

13_Related_Party_Transactions

13. Related Party Transactions	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
13. 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 remained outstanding to the sellers of NBS as of December 31, 2013, which was repaid during the six months ended June 30, 2014.

14_Fair_Value_Disclosures

14. Fair Value Disclosures	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
14. Fair Value Disclosures	'
	Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:
	Level 1—Quoted prices in active markets for identical assets or liabilities
	Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities
	Level 3—No observable pricing inputs in the market
	The following table represents the fair value of the liability measured at fair value on a recurring basis:
		Level 1			Level 2		Level 3		Total
	As of June 30, 2014
	Non-current liabilities:
	Derivative liability (see notes 6 and 8 )	$	-		$	-	$	7,082,401	$	7,082,401
	As of December 31, 2013
	Non-current liabilities:
	Derivative liability	$	-		$	10,515,472	$	-	$	10,515,472
	The following table reconciles the changes in the derivative liability categorized within Level 3 of the fair value hierarchy.
	Balance at December 31, 2013	$	-
	Transfer of Level 2 balance (a)		10,515,472
	Issuance of additional warrants		1,301,607
	Gains for the period:
	Included in earnings (loss)		(1,919,069	)
	Included in other comprehensive income (loss)		-
	Modification of warrant contracts (see note 8)		(2,815,609	)
	Balance at June 30, 2014	$	7,082,401
	(a) In the course of preparing its financial statements as of June 30, 2014, the Company determined that all of its derivative liabilities contained unobsoverable inputs and should therefore be reported in the Level 3 fair value hierarchy.

15_Gain_on_Extinguishment_of_D

15. Gain on Extinguishment of Debt	6 Months Ended
	Jun. 30, 2014
Gain On Extinguishment Of Debt	'
15. Gain on extinguishment of debt	'
	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 an international trade payable in the amount $2,908,882.  As a result, the Company derecognized the payable from its consolidated balance sheet at June 30, 2013 and recorded a corresponding gain on the extinguishment of debt.

16_Subsequent_Events

16. Subsequent Events	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
15. Subsequent Events	'
	In July of 2014, three holders of Series B-2 Preferred Stock, representing an aggregate stated value of $0.6 million, converted their shares of Series B-2 Preferred Stock into 120,000 shares of common stock.

1_Basis_of_Presentation_Consol1

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Basis of Presentation, Consolidation	'
	The accompanying unaudited condensed consolidated interim financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2013 for Fusion Telecommunications International, Inc. (“Fusion”) and its subsidiaries (collectively, the “Company”). These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”) and therefore omit or condense certain footnotes and other information normally included in consolidated interim financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All material intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, all adjustments (consisting of normal recurring accruals) considered necessary for the fair presentation of the condensed consolidated interim financial statements have been made. The results of operations for an interim period are not necessarily indicative of the results for the entire year.
	During the three and six months ended June 30, 2014 and 2013, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying condensed consolidated interim statements of operations. In addition, certain prior year balances have been reclassified to conform to the current presentation
Reverse split of common stock	'
	On April 9, 2014, the Company’s Board of Directors approved amendments to the Company’s Certificate of Incorporation to (a) effect a reverse stock split of all of the outstanding shares of the Company’s common stock at a ratio (the “Reverse Split Ratio”) of one for fifty (the “Reverse Stock Split”) and (b) a corresponding reduction in the number of shares of common stock that the Company is authorized to issue from 900,000,000 to 18,000,000. The Certificate of Amendment, which was approved by the Company’s stockholders on March 28, 2014, became effective on May 13, 2014, and at that time the Reverse Stock Split took place and each 50 shares of outstanding common stock of the Company was combined and automatically converted into one share of the Company’s common stock, with a par value of $0.01 per share. In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants and options to purchase common stock were proportionately adjusted at the Reverse Split Ratio consistent with the terms of such instruments. No fractional shares were issued as a result of the Reverse Stock Split, and any fractional share to which a stockholder may have been entitled as a result of the Reverse Stock Split was rounded up to the nearest whole share.
	As a result of the Reverse Stock Split, all share and per share amounts as of December 31, 2013, as well as for the three and six months ended June 30, 2013, have been restated at the Reverse Split Ratio to give effect to the Reverse Stock Split.
Income taxes	'
	The Company complies with accounting and reporting requirements with respect to accounting for income taxes, which require an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized.
	In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2014 and December 31, 2013. The Company is subject to income tax examinations by major taxing authorities for all tax years since 2010 and its tax returns 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 June 30, 2014 and December 31, 2013. During the three and six month periods ended June 30, 2014 and 2013, the Company recognized no adjustments for uncertain tax positions.
Earnings per share	'
	Basic earnings per share excludes dilution and is computed by dividing earnings attributable to common stockholders by the weighted-average number of common shares outstanding during the period.  Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, or resulted in the issuance of common stock that then shared in the income of the Company.  For the six months ended June 30, 2014, the diluted loss per share computation reflects a decrease in the loss attributable to common stockholders of approximately $688,000 for the gain on fair value of the Company’s derivative liability that was attributable to outstanding in-the-money warrants (see note 6).
	For the three months ended June 30, 2013, the computation of diluted earnings per share was as follows:
	Numerator:
	Income available to common stockholders		$	1,585,424
	Dividends on Series A-1, A-2 and A-4 Convertible Preferred Stock			100,349
			$	1,685,773
	Denominator:
	Weighted-average shares outstanding - basic			3,917,341
	Dilutive effect of employee stock options			192
	Dilutive effect of common stock purchase warrants			271,042
	Dilutive effect of Convertible Preferred Stock			1,404,971
	Weighted-average shares outstanding - diluted			5,593,546
	For the six months ended June 30, 2014 and 2013, the following securities were excluded in the calculation of diluted loss per share because their inclusion would be antidilutive:
			2014				2013
	Warrants			3,565,583				1,980,542
	Stock options			386,333				174,457
	Convertible preferred stock			4,726,572				1,404,971
				8,678,488				3,559,970
	The net loss per common share calculation includes a provision for preferred stock dividends on the Company’s outstanding Series A-1, A-2 and A-4 Preferred Stock (the “Series A Preferred Stock”) of approximately $100,000 for the three months ended June 30, 2014 and 2013, and approximately $200,000 for the six months ended June 30, 2014 and 2013.  As of June 30, 2014, the Board of Directors had not declared any dividends on the Company’s Series A Preferred Stock, and the Company had accumulated approximately $3,730,000 of preferred stock dividends.  The Board of Directors has declared dividends for the three and six months ended June 30, 2014 of $342,570 and $685,140, respectively, in connection with the Company’s Series B-2 Preferred Stock which, in accordance with the terms of the Series B-2 Preferred Stock, was paid in the form of 56,506 and 122,833 shares, respectively, of the Company’s common stock.
Sale of accounts receivable	'
	The Company has an agreement to sell certain of its accounts receivable under an arrangement with a third party. The Company records a loss on sale of accounts receivable at the time the receivables are sold for the difference between the book value of the receivables transferred and their respective purchase price. During the year ended December 31, 2013, the Company accounted for the sales of its accounts receivable as sales of financial assets and derecognized them from its consolidated balance sheet as of the date of sale. As of June 30, 2014, the Company determined that although the rights, title and interest of these receivables belong to the transferee, these transfers do not meet all of the criteria outlined in Accounting Standards Codification Topic (“ASC”) 860, Transfers and Servicing. As a result, at June 30, 2014 the Company recognized a note payable to unrelated parties in the amount of $1.1 million (see note 6) for the amount of uncollected receivables that had been transferred. The Company had derecognized $0.9 million of such receivables as of December 31, 2013, and the Company believes this difference was not material to its consolidated balance sheet as of that date.
	The Company recognized losses on the sale of accounts receivable in the three and six months ended June 30, 2014 of approximately $53,000 and $94,000, respectively. For the three and six months ended June 30, 2013, the Company recognized losses on the sale of accounts receivable of approximately $45,000 and $129,000, respectively. These amounts are recorded in Other income (expenses) in the accompanying consolidated statements of operations. The Company’s obligations to the purchaser of the receivables under the agreement are secured by a first priority lien on the accounts receivable of the Company’s Carrier Services business segment, and by a subordinated security interest on the other assets of the Company’s Carrier Services business segment. Based on the Company’s evaluation of the creditworthiness of the customers whose receivables the Company sells under this arrangement, the Company does not believe that there is any significant credit risk related to those receivables.
Goodwill	'
	Goodwill is the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired, and consists of $2.6 million of goodwill recognized in the acquisition of Network Billing Systems, LLC (“NBS”) on October 29, 2012, with the remainder resulting from the Broadvox Transaction described more fully in note 2. Goodwill at June 30, 2014 and December 31, 2013 was approximately $5.2 million and $5.1 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 six months ended June 30, 2014. There was no change in goodwill during the six months ended June 30, 2013:
	Balance at January 1, 2014		Additions		Other (a)	Balance at     June 30, 2014
	$          5,124,130		-		97,958	$        5,222,088
	(a) - Amount relates to adjustments to the preliminary purchase price for acquisitions completed on December 31, 2013.
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 six months ended June 30, 2014 and 2013.
	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.
Stock based compensation	'
	The Company accounts for stock-based compensation by recognizing the fair value of the compensation cost for all stock awards over their respective service periods, which are generally equal to the vesting period. This compensation cost is determined using option pricing models intended to estimate the fair value of the awards at the date of grant using the Black-Scholes option-pricing model. An offsetting increase to stockholders' equity is recorded equal to the amount of the compensation expense charge.
	Stock-based compensation expense recognized in the condensed consolidated interim statements of operations for the three and six month ended June 30, 2014 and 2013 includes compensation expense for stock-based payment awards granted prior to June 30, 2014 but not yet vested, based on the estimated grant date fair value. As stock-based compensation expense recognized in the condensed consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. When estimating forfeitures, the Company considers historical forfeiture rates as well as ongoing trends for actual option forfeiture.
	The impact of stock-based compensation expense on the Company’s results of operations for the three and six months ended June 30, 2014 was approximately $73,000 and $142,000, respectively. Stock-based compensation expense for the three and six months ended June 30, 2013 was approximately $28,000 and $56,000, respectively.  These amounts are included in selling, general, and administrative expenses in the condensed consolidated interim statements of operations.
	The following table summarizes the stock option activity for the six months ended June 30, 2014:
	(unaudited)
		Number of Options		Weighted Average Exercise Price
	Balance at December 31, 2013	351,464		$              16.29
	Shares granted during the period	37,450		$                6.67
	Shares exercised during the period	-		$                    -
	Shares forfeited during the period	(1,996)		$                6.23
	Shares expired during the period	(585)		$                9.72
	Shares outstanding at June 30, 2014	386,333		$              15.42
	Shares exercisable at June 30, 2014	130,460		$              36.31
	The Company calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model method with the following assumptions:
		(unaudited)
		Six Months Ended June 30,
		2014						2013
	Dividend yield	0				%		0	%
	Stock volatility	137.2				%		137.2	%
	Average Risk-free interest rate	2.34				%		0.52	%
	Average option term (years)	8.08						4
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 $33,000 and $6,000 for the three months ended June 30, 2014 and 2013, and approximately $77,000 and $15,000 for the six months ended June 30, 2014 and 2013, respectively.
Fair value of financial instruments	'
	The carrying amounts of the Company’s assets and liabilities approximate the fair value presented in the accompanying Condensed Consolidated Balance Sheets, due to their short-term maturities.
Use of estimates	'
	The preparation of condensed consolidated interim financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenues and expenses during the periods. Actual results could be affected by the accuracy of those estimates.
Restricted cash	'
	Restricted cash at June 30, 2014 and December 31, 2013 includes $1,000,000 of cash held in reserve as required by the terms of the Company’s senior lending agreement (see note 6), and certificates of deposit collateralizing a letter of credit in the aggregate amount of approximately $164,000. The letter of credit is required as security for one of the Company’s non-cancelable operating leases for office facilities.

1_Basis_of_Presentation_Consol2

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Earnings per share calculation	'
	Numerator:
		Income available to common stockholders						$                1,585,424
		Dividends on Series A-1, A-2 and A-4 Convertible Preferred Stock						100,349
								$                1,685,773
	Denominator:
		Weighted-average shares outstanding - basic						3,917,341
		Dilutive effect of employee stock options						192
		Dilutive effect of common stock purchase warrants						271,042
		Dilutive effect of Convertible Preferred Stock						1,404,971
		Weighted-average shares outstanding - diluted						5,593,546
Following securities were excluded in the calculation of diluted loss per share	'
		2014		2013
	Warrants	3,565,583		1,980,542
	Stock options	386,333		174,457
	Convertible preferred stock	4,726,572		1,404,971
		8,678,488		3,559,970
Change in goodwill	'
	Balance at January 1, 2014		Additions		Other (a)	Balance at     June 30, 2014
	$          5,124,130		-		97,958	$        5,222,088
	(a) - Amount relates to adjustments to the preliminary purchase price for acquisitions completed on December 31, 2013.
The following table summarizes the stock option activity	'
	(unaudited)
		Number of Options		Weighted Average Exercise Price
	Balance at December 31, 2013	351,464		$              16.29
	Shares granted during the period	37,450		$                6.67
	Shares exercised during the period	-		$                    -
	Shares forfeited during the period	(1,996)		$                6.23
	Shares expired during the period	(585)		$                9.72
	Shares outstanding at June 30, 2014	386,333		$              15.42
	Shares exercisable at June 30, 2014	130,460		$              36.31
Calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model	'
		(unaudited)
		Six Months Ended June 30,
		2014					2013
	Dividend yield	0				%	0	%
	Stock volatility	137.2				%	137.2	%
	Average Risk-free interest rate	2.34				%	0.52	%
	Average option term (years)	8.08					4

3_Prepaid_Expenses_and_Other_C1

3. Prepaid Expenses and Other Current Assets (Tables)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Prepaid expenses and other current assets	'
	Prepaid expenses and other current assets consist of the following at June 30, 2014 and December 31, 2013:
		30-Jun-14	31-Dec-13
		(unaudited)
	Prepaid insurance	$                      163,504	$                     63,737
	Due from purchaser of accounts receivable	278,691	236,232
	Escrowed funds – senior lenders	-	2,000,000
	Other prepaid expenses	893,902	404,818
	Total	$                   1,336,097	$                2,704,787

4_Intangible_Assets_Tables

4. Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Identifiable intangible assets	'
				June 30, 2014			31-Dec-13
				Gross Carrying Amount	Accumulated Amortization	Total	Gross Carrying Amount	Accumulated Amortization	Total
	Intangibles associated with the acquisition of NBS:
		Trademarks and tradename		$          563,000	$        (93,833)	$        469,167	$            563,000	$        (65,683)	$        497,317
		Proprietary technology		1,903,000	(634,333)	1,268,667	1,903,000	(444,033)	1,458,967
		Non-compete agreement		3,257,000	(1,809,444)	1,447,556	3,257,000	(1,266,611)	1,990,389
		Customer relationships		9,824,000	(1,078,487)	8,745,513	9,824,000	(754,988)	9,069,012
		Favorable lease intangible		218,000	(72,667)	145,333	218,000	(50,867)	167,133
		Total acquired intangibles		15,765,000	(3,688,764)	12,076,236	15,765,000	(2,582,182)	13,182,818
	Intangibles associated with the Broadvox Transaction:
		Proprietary technology		3,878,000	(387,800)	3,490,200	3,878,000	-	3,878,000
		Non-compete agreements		5,471,000	(1,367,750)	4,103,250	5,471,000	-	5,471,000
		Customer relationships		12,517,000	(481,423)	12,035,577	12,517,000	-	12,517,000
		Total acquired intangibles		21,866,000	(2,236,973)	19,629,027	21,866,000	-	21,866,000
		Total		$     37,631,000	$   (5,925,737)	$   31,705,263	$       37,631,000	$   (2,582,182)	$   35,048,818
Estimated future aggregate amortization expense	'
					($000's)
	Remainder of the year		2014		$          3,343
	Year ending December 31:		2015		6,505
			2016		2,865
			2017		2,795
			2018		2,441

5_Accounts_Payable_and_Accrued1

5. Accounts Payable and Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Accounts payable and accrued expenses	'
	Accounts payable and accrued expenses conist of the following at June 30, 2014 and December 31, 2013:
		June 30,		December 31,
		2014		2013
		(unaudited)
	Trade accounts payable	$	4,621,081	$	5,933,736
	Accrued expenses		1,452,369		3,101,103
	Accrued payroll and vacation		259,623		102,898
	Interest payable		84,492		421,632
	Sales and communications taxes payable		1,762,549		691,350
	Deferred revenue		805,377		407,426
	Other		1,510,831		503,405
	Total accounts payable and accrued expenses	$	10,496,322	$	11,161,550

6_Notes_Payable_NonRelated_Par1

6. Notes Payable Non-Related Parties (Tables)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Components of notes payable non-related parties	'
			30-Jun-14	31-Dec-13
	Senior Notes		$                 41,479,167	$              41,791,667
	Discount on Senior Notes		(4,042,840)	(4,377,680)
	Other notes payable		1,102,724	-
	Total notes payable - non-related parties		38,539,051	37,413,987
	Less:
		Current portion	(2,027,724)	(625,000)
	Non-current portion notes payable - non-related parties		$                 36,511,327	$              36,788,987

7_Notes_Payable_Related_Partie

7. Notes Payable Related Parties (Tables)	6 Months Ended
	Jun. 30, 2014
Notes Payable Related Parties Tables	'
Component of notes payable related party	'
			30-Jun-14	31-Dec-13
	NBS Sellers Notes		$                               -	$                       85,714
	Notes payable to Marvin Rosen		1,478,081	1,578,081
	Discount on notes payable to Marvin Rosen		(210,967)
	Other notes payable - related parties		125,000	125,000
	Total notes payable - related parties		1,392,114	1,788,795
	Less:
		Current portion of NBS Sellers Notes	-	(85,714)
		Current portion of notes payable to Marvin Rosen	-	(100,000)
		Current portion of other notes payable - related parties	(125,000)	(125,000)
	Non-current portion notes payable - related parties		$                   1,267,114	$                  1,478,081

11_Segment_Information_Tables

11. Segment Information (Tables)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Operating segment information	'
	Operating segment information for the three and six months ended June 30, 2014 and 2013 is summarized as follows:
	Three  months ended June 30, 2014
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$          7,510,875	$         15,630,098	$                  -	$    23,140,973
	Cost of revenues (exclusive of
		depreciation and amortization)	6,714,319	6,033,122	-	12,747,441
	Gross profit		796,556	9,596,976	-	10,393,532
	Depreciation and amortization		53,503	2,522,472	22,003	2,597,978
	Selling, general and administrative expenses		725,383	5,878,297	1,221,814	7,825,494
	Interest expense		-	(1,400,275)	(196,940)	(1,597,215)
	Loss on change in fair value of derivative liability				(690,878)	(690,878)
	Other (expenses) income		(52,997)	(25,556)	79,272	719
	Provision for income taxes		-	-	151,583	151,583
	Net loss		$             (35,327)	$            (229,624)	$    (2,203,946)	$    (2,468,897)
	Total assets		$          5,040,316	$         58,293,657	$     6,720,174	$    70,054,147
	Six months ended June 30, 2014
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$        14,673,371	$         31,372,431	$                  -	$    46,045,802
	Cost of revenues (exclusive of
		depreciation and amortization)	13,033,057	11,943,416	-	24,976,473
	Gross profit		1,640,314	19,429,015	-	21,069,329
	Depreciation and amortization		116,198	5,005,102	44,169	5,165,469
	Selling, general and administrative expenses		1,441,232	11,840,301	2,363,358	15,644,891
	Interest expense		-	(2,754,067)	(237,694)	(2,991,761)
	Gain on change in fair value of derivative liability				1,919,069	1,919,069
	Other (expenses) income		(94,037)	(26,656)	80,338	(40,355)
	Provision for income taxes		-	-	173,078	173,078
	Net loss		$             (11,153)	$            (197,111)	$       (818,892)	$       (1,027,156)
	Capital expenditures		$               56,995	$           1,760,712	$                  -	$      1,817,707
	Three Months Ending June 30, 2013
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$          6,738,527	$           7,491,651	$                  -	$    14,230,178
	Cost of revenues (exclusive of
		depreciation and amortization)	5,938,937	3,666,597	-	9,605,534
	Gross profit		799,590	3,825,054	-	4,624,644
	Depreciation and amortization		48,219	803,006	21,359	872,584
	Selling, general and administrative expenses		748,757	2,600,306	1,084,785	4,433,848
	Interest expense		-	(583,344)	(86,387)	(669,731)
	Loss on extinguishment of debt				(92,376)	(92,376)
	Gain on change in fair value of derivative liability				238,517	238,517
	Other (expenses) income		(43,747)	28,107	(2,091)	(17,731)
	Gain on extinguishment of accounts payable			-	2,908,882	2,908,882
	Provision for income taxes		-			-
	Net (loss) income		$             (41,133)	$            (133,495)	$     1,860,401	$      1,685,773
	Total assets		$          3,332,067	$         23,091,098	$        897,682	$    27,320,847
	Six Months Ended June 30, 2013
			Carrier Services	Business Services	Corporate and Unallocated	Consolidated
	Revenues		$        15,431,815	$         14,966,784	$                  -	$    30,398,599
	Cost of revenues (exclusive of
		depreciation and amortization)	13,920,474	7,436,656	-	21,357,130
	Gross profit		1,511,341	7,530,128	-	9,041,469
	Depreciation and amortization		96,432	1,583,422	42,645	1,722,499
	Selling, general and administrative expenses		1,617,952	5,051,717	2,031,777	8,701,446
	Interest expense		-	(1,148,822)	(180,428)	(1,329,250)
	Loss on extinguishment of debt				(150,579)	(150,579)
	Gain on change in fair value of derivative liability				105,267	105,267
	Other (expenses) income		(127,231)	38,711	26,169	(62,351)
	Gain on extinguishment of accounts payable			-	2,908,882	2,908,882
	Net (loss) income		$           (330,274)	$            (215,122)	$        634,889	$           89,493
	Capital expenditures		$               49,768	$              561,342	$          17,497	$         628,607

12_Supplemental_Disclosure_of_1

12. Supplemental Disclosure of Cash Flow Information (Tables)	6 Months Ended
	Jun. 30, 2014
Supplemental Disclosure Of Cash Flow Information Tables	'
Supplemental Disclosure of Cash Flow Information	'
		Six months ended June 30,
		2014	2013
	Cash paid for interest	$         2,749,360	$            931,380
	Cash paid for income taxes	$              21,495	$                     -
	Supplemental schedule of non-cash financing and investing activities:
	Conversion of notes and interest payable - related parties to common stock	$                      -	$            345,000
	Conversion of accounts payable - related parties to common stock	$                      -	$                2,500
	Assets acquired under capital leases	$              49,090	$            121,834

14_Fair_Value_Disclosures_Tabl

14. Fair Value Disclosures (Tables)	6 Months Ended
	Jun. 30, 2014
Fair Value Disclosures Tables	'
Fair value of the liability measured at fair value on a recurring basis	'
	The following table represents the fair value of the liability measured at fair value on a recurring basis:
				Level 1		Level 2	Level 3	Total
	As of June 30, 2014
	Non-current liabilities:
		Derivative liability (see notes 6 and 8 )		$               -		$                      -	$   7,082,401	$       7,082,401
	As of December 31, 2013
	Non-current liabilities:
		Derivative liability		$               -		$       10,515,472	$                     -	$     10,515,472
Changes in the derivative liability categorized within Level 3 of the fair value hierarchy	'
	The following table reconciles the changes in the derivative liability categorized within Level 3 of the fair value hierarchy.
	Balance at December 31, 2013		$	-
	Transfer of Level 2 balance (a)			10,515,472
	Issuance of additional warrants			1,301,607
	Gains for the period:
	Included in earnings (loss)			(1,919,069	)
	Included in other comprehensive income (loss)			-
	Modification of warrant contracts (see note 8)			(2,815,609	)
	Balance at June 30, 2014		$	7,082,401

1_Basis_of_Presentation_Consol3

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
Numerator:	'
Income available to common stockholders	$1,585,424
Dividends on Series A-1, A-2 and A-4 Convertible Preferred Stock	100,349
Total	$1,685,773
Denominator:	'
Weighted-average shares outstanding - basic	3,917,341
Dilutive effect of employee stock options	192
Dilutive effect of common stock purchase warrants	271,042
Dilutive effect of Convertible Preferred Stock	1,404,971
Weighted-average shares outstanding - diluted	5,593,546

1_Basis_of_Presentation_Consol4

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details 1)	Jun. 30, 2014	Jun. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	8,678,488	3,559,970
Warrant	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	3,565,583	1,980,542
Stock Options	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	386,333	174,457
Convertible Preferred	'	'
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]	'	'
Antidilutive securities	4,726,572	1,404,971

1_Basis_of_Presentation_Consol5

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details 2) (USD $)	6 Months Ended
	Jun. 30, 2014
Notes to Financial Statements	'
Balance at January 1, 2014	$5,124,130
Additions	0
Other	97,958
Balance at March 31, 2014	$5,222,088

1_Basis_of_Presentation_Consol6

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details 3) (USD $)	6 Months Ended
	Jun. 30, 2014
Summarizes the stock option activity	'
Outstanding Beginning Balance, Number of Options	351,464
Shares granted during the period, Number of Options	37,450
Shares exercised during the period, Number of Options	0
Shares forfeited during the period, Number of Options	-1,996
Shares expired during the period, Number of Options	-585
Shares outstanding at June 30, 2014, Number of Options	386,333
Shares exercisable at June 30, 2014, Number of Options	130,460
Outstanding Beginning Balance, Weighted Average Exercise Price	$16.29
Shares granted during the period, Weighted Average Exercise Price	$6.67
Shares exercis during the period, Weighted Average Exercise Price	$0
Shares forfeited during the period, Weighted Average Exercise Price	$6.23
Shares expired during the period, Weighted Average Exercise Price	$9.72
Shares outstanding at June 30, 2014, Weighted Average Exercise Price	$15.42
Shares exercisable at June 30, 2014, Weighted Average Exercise Price	$36.31

1_Basis_of_Presentation_Consol7

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Deatils 4)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Black-Scholes option-pricing model method with the following assumptions	'	'
Dividend yield	0.00%	0.00%
Stock volatility	137.20%	137.20%
Average Risk-free interest rate	2.43%	0.52%
Average option term (years)	'8 years 0 months 29 days	'4 years

1_Basis_of_Presentation_Consol8

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Provision for preferred stock dividends	$100,000	$100,000	$200,000	$200,000	'
Loss on sale of accounts receivable	53,000	45,000	94,000	129,000	'
Goodwill	5,222,088	'	5,222,088	'	5,124,130
Stock-based compensation expense	73,000	28,000	142,000	56,000	'
Total unrecognized compensation cost	647,000	'	647,000	'	'
Weighted-average period for Stock Incentive Plans	'	'	'2 years 1 month 20 days	'	'
Advertising and marketing expenses	33,000	6,000	77,000	15,000	'
Cash restricted held in reserve	1,000,000	'	1,000,000	'	1,000,000
Certificate of deposit collateralizing a letter of credit	164,000	'	164,000	'	164,000
Series B Preferred Stock [Member]	'	'	'	'	'
Preferred stock dividends	342,570	'	'	'	'
Dividend paid in form of shares	56,506	'	'	'	'
Series A Preferred Stock [Member]	'	'	'	'	'
Preferred stock dividends	'	'	0	'	'
Series B Preferred Stock [Member]	'	'	'	'	'
Preferred stock dividends	'	'	$685,140	'	'
Dividend paid in form of shares	'	'	122,833	'	'

2_Acquisition_Details_Narrativ

2. Acquisition (Details Narrative) (USD $)	6 Months Ended
In Millions, unless otherwise specified	Jun. 30, 2013
Acquisition Details Narrative	'
Consolidated revenues	$46.20
Net loss	$3

3_Prepaid_Expenses_and_Other_C2

3. Prepaid Expenses and Other Current Assets (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Prepaid expenses and other current assets	'	'
Prepaid insurance	$163,504	$63,737
Due from purchaser of accounts receivable	278,691	236,232
Escrowed funds - senior lenders	0	2,000,000
Other prepaid expenses	893,902	404,818
Total	$1,336,097	$2,704,787

4_Intangible_Assets_Details

4. Intangible Assets (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Gross Carrying Amount	$37,631,000	$37,631,000
Accumulated Amortization	-5,925,737	-2,582,182
Total	31,705,263	35,048,818
NBS [Member] | Trademarks and tradename	'	'
Gross Carrying Amount	563,000	563,000
Accumulated Amortization	-93,833	-65,683
Total	469,167	497,317
NBS [Member] | Proprietary technology	'	'
Gross Carrying Amount	1,903,000	1,903,000
Accumulated Amortization	-634,333	-444,033
Total	1,268,667	1,458,967
NBS [Member] | Non-compete agreement	'	'
Gross Carrying Amount	3,257,000	3,257,000
Accumulated Amortization	-1,809,444	-1,266,611
Total	1,447,556	1,990,389
NBS [Member] | Customer relationships	'	'
Gross Carrying Amount	9,824,000	9,824,000
Accumulated Amortization	-1,078,487	-754,988
Total	8,745,513	9,069,012
NBS [Member] | Favorable lease intangible	'	'
Gross Carrying Amount	218,000	218,000
Accumulated Amortization	-72,667	-50,867
Total	145,333	167,133
NBS [Member] | Total acquired intangibles	'	'
Gross Carrying Amount	15,765,000	15,765,000
Accumulated Amortization	-3,688,764	-2,582,182
Total	12,076,236	13,182,818
Broadvox [Member] | Proprietary technology	'	'
Gross Carrying Amount	3,878,000	3,878,000
Accumulated Amortization	-387,800	0
Total	3,490,200	3,878,000
Broadvox [Member] | Non-compete agreement	'	'
Gross Carrying Amount	5,471,000	5,471,000
Accumulated Amortization	-1,367,750	0
Total	4,103,250	5,471,000
Broadvox [Member] | Customer relationships	'	'
Gross Carrying Amount	12,517,000	12,517,000
Accumulated Amortization	-481,423	0
Total	12,035,577	12,517,000
Broadvox [Member] | Total acquired intangibles	'	'
Gross Carrying Amount	21,866,000	21,866,000
Accumulated Amortization	-2,236,973	0
Total	$19,629,027	$21,866,000

4_Intangible_Assets_Details_1

4. Intangible Assets (Details 1) (USD $)	Jun. 30, 2014
In Thousands, unless otherwise specified
Notes to Financial Statements	'
Year ending December 31: 2014	$3,343
2015	6,505
2016	2,865
2017	2,795
2018	$2,441

4_Intangible_Assets_Details_Na

4. Intangible Assets (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Notes to Financial Statements	'	'	'	'
Amortization expense	$1,700,000	$600,000	$3,300,000	$1,100,000

5_Accounts_Payable_and_Accrued2

5. Accounts Payable and Accrued Expenses (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Notes to Financial Statements	'	'
Trade accounts payable	$4,621,081	$5,933,736
Accrued expenses	1,452,369	3,101,103
Accrued payroll and vacation	259,623	102,898
Interest payable	84,492	421,632
Sales and communications taxes payable	1,762,549	691,350
Deferred revenue	805,377	407,426
Other	1,510,831	503,405
Total accounts payable and accrued expenses	$10,496,322	$11,161,550

6_Notes_Payable_NonRelated_Par2

6. Notes Payable - Non-Related Parties (Details) (NonRelatedParty, USD $)	Jun. 30, 2014	Dec. 31, 2013
NonRelatedParty	'	'
Senior Notes	$41,479,167	$41,791,667
Discount on senior notes	-4,042,840	-4,377,680
Other notes payable	1,102,724	0
Total notes payable - non-related parties	38,539,051	37,413,987
Less : Current portion	-2,027,724	-625,000
Non-current portion notes payable - non-related parties	$36,511,327	$36,788,987

6_Notes_Payable_Non_Related_Pa

6. Notes Payable - Non Related Parties (Details Narrative) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Notes to Financial Statements	'	'	'	'	'
Accreted Discount on senior notes	$4,000,000	'	$4,000,000	'	$4,400,000
Fair value derivative liability	3,900,000	'	3,900,000	'	4,500,000
Recognized gain (loss) on change of fair value	$200,000	$200,000	$700,000	$100,000	'

7_Notes_Payable_Related_Party_

7. Notes Payable - Related Party (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Notes Payable - Related Parties	$1,267,114	$1,478,081
RelatedParty	'	'
NBS Sellers Notes	0	85,714
Notes payable to Marvin Rosen	1,478,081	1,578,081
Discount on notes payable to Marvin Rosen	-210,967	0
Other notes payable - related parties	125,000	125,000
Total notes payable - related parties	1,392,114	1,788,795
Current portion of NBS Sellers Notes	0	-85,714
Current portion of notes payable to Marvin Rosen	0	-100,000
Current portion of notes payable	-125,000	-125,000
Notes Payable - Related Parties	$1,267,114	$1,478,081

8_Equity_Transactions_Details_

8. Equity Transactions (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Cumulative Convertible Preferred Stock issued to investors, shares	4,358	'	'
Warrants to purchase common stock issued to investors	278,912	'	'
Cash compensation paid to broker/dealers	$400,000	'	'
Derivative liability related to investor warrants	1,300,000	'	'
Fair value of derivative liability	3,200,000	600,000	'
Change in fair value of derivative liability due to gain	$500,000	'	$1,200,000

11_Segment_Information_Details

11. Segment Information (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Segment Reporting Information [Line Items]	'	'	'	'
Revenues	$23,140,973	$14,230,178	$46,045,802	$30,398,599
Cost of revenues (exclusive of depreciation and amortization)	12,747,441	9,605,534	24,976,473	21,357,130
Gross profit	10,393,532	4,624,644	21,069,329	9,041,469
Depreciation and amortization	2,597,978	872,584	5,165,469	1,722,499
Selling, general and administrative expenses	7,825,494	4,433,848	15,644,891	8,701,446
Interest expense	-1,597,215	-669,731	-2,991,761	-1,329,250
Loss on extinguishment of debt	0	-92,376	0	-150,579
Loss on change in fair value of derivative liability	'	'	1,919,069	105,267
Gain on extinguishment of accounts payable	0	2,908,882	0	2,908,882
(Benefit) Provision for income taxes	151,583	0	173,078	0
Carrier Services	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'
Revenues	7,510,875	6,738,527	14,673,371	15,431,815
Cost of revenues (exclusive of depreciation and amortization)	6,714,319	5,938,937	13,033,057	13,920,474
Gross profit	796,556	799,590	1,640,314	1,511,341
Depreciation and amortization	53,503	48,219	116,198	96,432
Selling, general and administrative expenses	-725,383	-748,757	-1,441,232	-1,617,952
Interest expense	0	0	0	0
Loss on extinguishment of debt	0	0	0	0
Loss on change in fair value of derivative liability	0	0	0	0
Gain on change in fair value of derivative liability	0	0	0	0
Other (expenses) income	-52,997	-43,747	-94,037	-127,231
Gain on extinguishment of accounts payable	0	0	0	0
(Benefit) Provision for income taxes	0	0	0	0
Net income (loss)	-35,327	-41,133	-11,153	-330,274
Total assets (Capital Expenditures)	5,040,316	3,332,067	56,995	49,768
Business Services And Other	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'
Revenues	15,630,098	7,491,651	31,372,431	14,966,784
Cost of revenues (exclusive of depreciation and amortization)	6,033,122	3,666,597	11,943,416	7,436,656
Gross profit	9,596,976	3,825,054	19,429,015	7,530,128
Depreciation and amortization	2,522,472	803,006	5,005,102	1,583,422
Selling, general and administrative expenses	-5,878,297	-2,600,306	-11,840,301	-5,051,717
Interest expense	-1,400,275	-583,344	-2,754,067	-1,148,822
Loss on extinguishment of debt	0	0	0	0
Loss on change in fair value of derivative liability	0	0	0	0
Gain on change in fair value of derivative liability	0	0	0	0
Other (expenses) income	-25,556	28,107	-26,656	38,711
Gain on extinguishment of accounts payable	0	0	0	0
(Benefit) Provision for income taxes	0	0	0	0
Net income (loss)	-229,674	-133,495	-197,111	-215,122
Total assets (Capital Expenditures)	58,293,606	23,091,098	1,760,712	561,342
Corporate and Unallocated	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'
Revenues	0	0	0	0
Cost of revenues (exclusive of depreciation and amortization)	0	0	0	0
Gross profit	0	0	0	0
Depreciation and amortization	22,003	21,359	44,169	42,645
Selling, general and administrative expenses	-1,221,814	-1,084,785	-2,363,358	-2,031,777
Interest expense	-196,940	-86,387	-237,694	-180,428
Loss on extinguishment of debt	0	-92,376	0	0
Loss on change in fair value of derivative liability	-690,878	0	0	-150,579
Gain on change in fair value of derivative liability	0	238,517	1,919,069	105,267
Other (expenses) income	79,272	-2,091	80,338	26,169
Gain on extinguishment of accounts payable	0	2,908,882	0	2,908,882
(Benefit) Provision for income taxes	151,583	0	173,078	0
Net income (loss)	-2,203,946	1,860,401	-818,892	634,889
Total assets (Capital Expenditures)	6,720,174	897,682	0	17,497
Consolidated	'	'	'	'
Segment Reporting Information [Line Items]	'	'	'	'
Revenues	23,140,973	14,230,178	46,045,802	30,398,599
Cost of revenues (exclusive of depreciation and amortization)	12,747,441	9,605,534	24,976,473	21,357,130
Gross profit	10,393,532	4,624,644	21,069,329	9,041,469
Depreciation and amortization	2,597,978	872,584	5,165,469	1,722,499
Selling, general and administrative expenses	-7,825,494	-4,433,848	-15,644,891	-8,701,446
Interest expense	-1,597,215	-669,731	-2,991,761	-1,329,250
Loss on extinguishment of debt	0	-92,376	0	0
Loss on change in fair value of derivative liability	-690,878	0	0	-150,579
Gain on change in fair value of derivative liability	0	238,517	1,919,069	105,267
Other (expenses) income	719	-17,731	-40,355	-62,351
Gain on extinguishment of accounts payable	0	2,908,882	0	2,908,882
(Benefit) Provision for income taxes	151,583	0	173,078	0
Net income (loss)	-2,468,897	1,685,773	-1,027,156	89,493
Total assets (Capital Expenditures)	$70,054,147	$27,320,847	$1,817,707	$628,607

12_Supplemental_Disclosure_of_2

12. Supplemental Disclosure of Cash Flow Information (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Supplemental Disclosure Of Cash Flow Information Details	'	'
Cash paid for interest	$2,749,360	$931,380
Cash paid for income taxes	21,495	0
Supplemental schedule of non-cash financing activities:	'	'
Conversion of notes and interest payable - related parties to common stock	0	345,000
Conversion of accounts payable - related parties to common stock	0	2,500
Assets acquired under capital leases	$49,090	$121,834

13_Related_Party_Transactions_

13. Related Party Transactions (Details Narrative) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Notes to Financial Statements	'	'
Related party payable	$0	$226,000

14_Fair_Value_Disclosures_Deta

14. Fair Value Disclosures (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Non-current liabilities:	'	'
Derivative liability	$7,082,401	$10,515,472
Level 1	'	'
Non-current liabilities:	'	'
Derivative liability	0	0
Level 2	'	'
Non-current liabilities:	'	'
Derivative liability	0	10,515,472
Level 3	'	'
Non-current liabilities:	'	'
Derivative liability	$7,082,401	$0

14_Fair_Value_Disclosures_Deta1

14. Fair Value Disclosures (Details 1) (USD $)	6 Months Ended
	Jun. 30, 2014
Fair Value Disclosures Tables	'
Balance at December 31, 2013	$0
Transfer of Level 2 balance (a)	10,515,472
Issuance of additional warrants	1,301,607
Gains for the period:	'
Included in earnings (loss)	-1,919,069
Included in other comprehensive income (loss)	0
Modification of warrant contracts (see note 8)	-2,815,609
Balance at June 30, 2014	$7,082,401