Crexendo (CXDO) 10-K 4 Mar 15 2014 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Feb. 24, 2015
Document And Entity Information
Entity Registrant Name	Crexendo, Inc.
Entity Central Index Key	1075736
Document Type	10-K
Document Period End Date	31-Dec-14
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
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 Public Float	$9,917
Entity Common Stock, Shares Outstanding		12,700,624
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Current Assets:
Cash and cash equivalents	$2,906	$3,076
Restricted cash	133	487
Trade receivables, net of allowance for doubtful accounts of $49 as of December 31, 2014 and $163 as of December 31, 2013	543	1,090
Inventories	72	217
Equipment financing receivables	171	94
Income tax receivable	0	55
Prepaid expenses and other	1,032	620
Total Current Assets	4,857	5,639
Certificate of deposit	251	250
Long-term trade receivables, net of allowance for doubtful accounts of $19 as December 31, 2014 and $37 as of December 31, 2013	64	116
Long-term equipment financing receivables	455	398
Property and equipment, net	68	2,195
Deferred income tax assets, net	381	244
Intangible assets, net	676	571
Goodwill	272	75
Long-term prepaid rent	376	0
Other long-term assets	114	119
Total Assets	7,514	9,607
Current Liabilities:
Accounts payable	47	201
Accrued expenses	1,331	1,095
Income tax payable	7	0
Contingent Consideration	211	51
Deferred income tax liability	381	244
Deferred revenue, current portion	726	1,199
Total Current Liabilities	2,703	2,790
Deferred revenue, net of current portion	64	116
Other long-term liabilities	203	0
Total Liabilities	2,970	2,906
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.001 per share - authorized 5,000,000 shares; none issued	0	0
Common stock, par value $0.001 per share - authorized 25,000,000 shares, 12,681,617 shares outstanding as of December 31, 2014 and 10,801,315 shares outstanding as of December 31, 2013	13	11
Additional paid-in capital	55,413	50,998
Contingent consideration	0	198
Accumulated deficit	-50,882	-44,506
Total Stockholders' Equity	4,544	6,701
Total Liabilities and Stockholders' Equity	$7,514	$9,607

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, except Share data, unless otherwise specified
Assets
Allowance for Doubtful Accounts - Trade Receivables	$49	$163
Allowance for Doubtful accounts - Long Term Trade Receivables	$19	$37
Stockholders Equity
Preferred Stock par value	$0.00	$0.00
Preferred Stock Shares Authorized	5,000,000	5,000,000
Preferred Stock Issued	0	0
Common Stock par value	$0.00	$0.00
Common Stock Shares Authorized	25,000,000	25,000,000
Common Stock Outstanding	12,681,617	10,801,315

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
Revenue	$7,594	$10,328
Operating expenses:
Cost of revenue	3,582	4,091
Selling and marketing	2,280	3,055
General and administrative	6,727	6,970
Research and development	1,604	1,692
Goodwill impairment	0	265
Total operating expenses	14,193	16,073
Loss from operations	-6,599	-5,745
Other income:
Interest income	150	501
Other income, net	150	24
Total other income, net	300	525
Loss before income tax	-6,299	-5,220
Income tax benefit/(provision)	-77	257
Net loss	($6,376)	($4,963)
Net loss per common share:
Basic	($0.57)	($0.46)
Diluted	($0.57)	($0.46)
Weighted-average common shares outstanding:
Basic	11,163,592	10,714,353
Diluted	11,163,592	10,714,353

Consolidated_Statements_of_Sto

Consolidated Statements of Stockholders' Equity (USD $)	Common Stock	Additional Paid-in Capital	Contingent Consideration	Accumulated Deficit	Total
In Thousands, except Share data
Beginning Balance, Amount at Dec. 31, 2012	$11	$49,824		($39,543)	$10,292
Beginning Balance, Shares at Dec. 31, 2012	10,669,201
Expense for stock options granted to employees		808			808
Stock issued under stock award plans, Amount		181			181
Stock issued under stock award plans, Shares	67,832
Issuance of common stock in connection with a business acquisition, Amount		107			107
Issuance of common stock in connection with a business acquisition, Shares	38,516
Contingent consideration			276		276
Issuance of common stock from contingent consideration, Amount		78	-78
Issuance of common stock from contingent consideration, Shares	25,766
Net loss				-4,963	-4,963
Ending Balance, Amount at Dec. 31, 2013	11	50,998	198	-44,506	6,701
Ending Balance, Shares at Dec. 31, 2013	10,801,315
Expense for stock options granted to employees		784			784
Stock issued under stock award plans, Amount		70			70
Stock issued under stock award plans, Shares	28,418
Issuance of common stock for rent, Amount		966			966
Issuance of common stock for rent, Shares	300,000
Issuance of common stock in connection with a business acquisition, Amount		134			134
Issuance of common stock in connection with a business acquisition, Shares	40,521
Issuance of common stock from contingent consideration, Amount		198	-198
Issuance of common stock from contingent consideration, Shares	62,088
Issuance of common stock in connection with stock purchase agreement, Amount	2	1,998			2,000
Issuance of common stock in connection with stock purchase agreement, Shares	1,449,275
Issuance of common stock warrants in connection with stock purchase agreement, Amount		265			265
Net loss				-6,376	-6,376
Ending Balance, Amount at Dec. 31, 2014	$13	$55,413		($50,882)	$4,544
Ending Balance, Shares at Dec. 31, 2014	12,681,617

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	($6,376)	($4,963)
Adjustments to reconcile net loss to net cash used for operating activities:
Goodwill impairment	0	265
Lease abandonment	0	-606
Amortization of prepaid rent	268	0
Depreciation and amortization	663	1,145
Expense for warrants and stock options issued to employees	1,049	808
Change in uncertain tax positions	0	-253
Loss/(gain) on disposal of property and equipment	-1	3
Amortization of deferred gain	-78	0
Change in fair value of contingent consideration	3	-13
Changes in assets and liabilities, net of effects of acquisitions:
Trade receivables	599	2,232
Equipment financing receivables	-134	-368
Inventories	145	-46
Income tax receivable	55	379
Prepaid expenses and other	-90	-287
Other long-term assets	5	-22
Accounts payable, accrued expenses and other	72	-1,520
Income tax payable	7	0
Deferred revenue	-525	-2,136
Net cash used for operating activities	-4,338	-5,382
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment	-8	-62
Proceeds from sale of property and equipment	2,002	15
(Acquisition)/Redemption of certificate of deposit	-1	250
Change in restricted cash	354	957
Business acquisitions	-195	-300
Net cash provided by investing activities	2,152	860
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options	70	181
Payments of contingent consideration	-54	-23
Proceeds from sale of common stock and warrants	2,000	0
Net cash provided by financing activities	2,016	158
NET DECREASE IN CASH AND CASH EQUIVALENTS	-170	-4,364
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	3,076	7,440
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2,906	3,076
Supplemental disclosure of cash flow information:
Cash (used)/received during the year for: Income taxes	-14	383
Supplemental disclosure of non-cash investing and financing information:
Prepayment of rent with common stock	966	0
Business acquisition with stock (Note 3)	134	107
Contingent consideration related to acquisition (Note 3)	211	363
Exchange of property and equipment for services rendered	$0	$4

1_Significant_Accounting_Polic

1. Significant Accounting Policies	12 Months Ended
	Dec. 31, 2014
Significant Accounting Policies
1. Significant Accounting Policies	Description of Business - Crexendo, Inc. is incorporated in the state of Delaware. As used hereafter in the notes to consolidated financial statements, we refer to Crexendo, Inc. and its wholly owned subsidiaries, as “we,” “us,” or “our Company”. We are a hosted services company that provides web hosting, hosted telecommunications services, e-commerce software, website development software, and broadband internet services for businesses and entrepreneurs.  Our services are designed to make enterprise-class hosting services available to small, medium-sized and enterprise-sized businesses at affordable monthly rates.  The Company has two operating segments, which consist of Hosted Telecommunications Services and Web Services.
	The Company has transformed into a start-up company with the inherent risks and uncertainties of funding operations until profitability is achieved.  We currently plan to fund our operations during the next twelve months using our cash and cash equivalents of $2,906,000 and our cash flows from operations, which we believe based on forecasts will be sufficient.  However, the company has the ability to call outstanding warrants to provide additional liquidity for approximately $690,000, if needed.  In addition, if needed, the Company received a commitment from the CEO, and major shareholder, in February 2015 that he would provide up to $1,000,000 of financial support to enable the Company to fund its operations through March 31, 2016.  As such, the Company believes it will have sufficient funds to sustain its operations during the next twelve months as a result of the sources of funding detailed above.
	Basis of Presentation – The consolidated financial statements include the accounts and operations of Crexendo, Inc. and its wholly owned subsidiaries, which include Avail 24/7 Inc., Crexendo Business Solutions, Inc., StoresOnline Inc., StoresOnline International Canada ULC, StoresOnline International, Inc., StoresOnline International Ltd., Internet Training Group, Inc., Crexendo International, Inc., Crexendo Telecom, Inc., and Crexendo Property Management, LLC.   All intercompany account balances and transactions have been eliminated in consolidation.  The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements reflect the results of operations, financial position, changes in stockholders’ equity, and cash flows of our Company.
	Cash and Cash Equivalents - We consider all highly liquid, short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. As of December 31, 2014, we had cash and cash equivalents in financial institutions in excess of federally insured limits in the amount of $2,487,000.
	Restricted Cash – We classified $133,000 and $487,000 as restricted cash as of December 31, 2014 and 2013, respectively.  Cash is restricted for state licensing letters of credit and compensating balance requirements on merchant accounts, and purchasing card agreements.  As of December 31, 2014, we had restricted cash in financial institutions in excess of federally insured limits in the amount of $133,000.
	Trade Receivables – We have historically offered to our web site development software customers the option to finance, typically through 24 and 36-month extended payment term arrangements (“EPTAs”), purchases made at our suspended Internet Training Workshops through our Web Services segment. EPTAs are reflected as short-term and long-term trade receivables, as applicable, as we have the intent and ability to hold the receivables for the foreseeable future, until maturity or payoff.  EPTAs are recorded on a nonaccrual cash basis beginning on the contract date. Trade receivables from our hosted telecommunications and web services segments are recorded at invoiced amounts.
	Allowance for Doubtful Accounts – For sales made through EPTA contracts, we record an allowance for doubtful accounts each reporting period based on the Company’s ongoing assessment of collectability. The allowance represents estimated losses resulting from customers’ failure to make required payments. The allowance for doubtful accounts for EPTAs is netted against the current and long-term trade receivables balances. The allowance estimate is based on historical collection experience, specific identification of probable bad debts based on collection efforts, aging of trade receivables, customer payment history, and other known factors, including current economic conditions. We believe that the allowance for doubtful accounts is adequate based on our assessment to date, however, actual collection results may differ materially from our expectations. Because revenue generated from customers financing through EPTAs is deferred and not recognized prior to the collection of cash, adjustments to the allowance for doubtful accounts related to our EPTA contracts increase or decrease deferred revenue. Trade receivables are written off against the allowance when the related customers are no longer making required payments and the trade receivables are determined to be uncollectible, typically 90 days past their original due date.  For sales made in our Hosted Telecommunications Services and Web Services segments, the allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence.
	Interest Income - Interest income is primarily earned from EPTA contracts. EPTA contract terms generally contain an 18% simple interest rate. Interest income is recognized on these accounts only to the extent cash is received as the receivables are generally 24 and 36-months in length and collection of the full amount of the receivable is not probable. We recognized interest income of $150,000 and $501,000 for the years ended December 31, 2014 and 2013, respectively.
	Inventory - Telecommunications equipment inventory is stated at the lower of cost (first-in, first-out method) or market.   In accordance with applicable accounting guidance, we regularly evaluate whether inventory is stated at the lower of cost or market.
	Certificate of Deposit - We hold a $251,000 certificate of deposit as collateral for merchant accounts, which automatically renews every 12 months. The certificate of deposit is classified as long-term in the consolidated balance sheets.
	Property and Equipment - Depreciation and amortization expense is computed using the straight-line method in amounts sufficient to allocate the cost of depreciable assets over their estimated useful lives ranging from two to five years. The cost of leasehold improvements is amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the related lease. Depreciation and amortization expense is included in general and administrative expenses and totaled $415,000 and $1,022,000 for the year ended December 31, 2014 and 2013, respectively.  Depreciable lives by asset group are as follows:
	Computer software	3 years
	Furniture and fixtures	4 years
	Leasehold improvements	2 to 5 years
	Maintenance and repairs are expensed as incurred. The cost and accumulated depreciation of property and equipment sold or otherwise retired are removed from the accounts and any related gain or loss on disposition is reflected in net income or loss for the year.
	Goodwill – Goodwill is tested for impairment using a fair-value-based approach on an annual basis (December 31) and between annual tests if indicators of potential impairment exist.  During the quarter ended September 30, 2013, the Company made a strategic decision to limit the sale of web services to our enterprise sized customers.  As this change significantly impacted revenue in our Web Services segment, the Company determined that the change was a triggering event requiring the Company to perform an impairment assessment to determine whether the carrying amount of the goodwill exceeded its fair value. In accordance with the accounting guidance, the Company performed the two-step goodwill impairment test and concluded that the goodwill related to CastleWave was impaired and recorded an impairment charge of $265,000 to eliminate the carrying value of the CastleWave goodwill.
	Intangible Assets - Our intangible assets consist primarily of assets acquired in the acquisition of PBX Central and OSV, which include customer relationships and developed technology.  The fair value of identifiable intangible assets is based upon the lower of discounted future cash flow projections or the amount paid in an arm’s length transaction.  The intangible assets are amortized following the patterns in which the economic benefits are consumed.  Amortization expense from these acquired assets is included in general and administrative expenses and totaled $248,000 and $123,000 for the years ended December 31, 2014 and 2013, respectively.
	We periodically review the estimated useful lives of our intangible assets and review these assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The determination of impairment is based on estimates of future undiscounted cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will be equal to the excess of the carrying value over the fair value of the asset.
	Use of Estimates - In preparing the consolidated financial statements, management makes assumptions, estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods.  Specific estimates and judgments include inventory valuation and obsolescence, valuation of goodwill and intangible assets in connection with business acquisitions, allowances for doubtful accounts, sales returns and allowances, uncertainties related to certain income tax benefits, valuation of deferred income tax assets, valuations of share-based payments and recoverability of long-lived assets.  Management’s estimates are based on historical experience and on our expectations that are believed to be reasonable.  The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from our current estimates and those differences may be material.
	Revenue Recognition - In general, we recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.  We recognize revenue from our Hosted Telecommunications Services and Web Services segments on an accrual basis, with the exception of our EPTA cash receipts which are recognized on a cash basis.  Specifics to revenue category are as follows:
	Software licenses and DVD training courses sold under EPTAs are recognized as revenue upon receipt of cash from customers and not at the time of sale. Accounting standards require revenue to be deferred until customer payments are received if collection of the original principal balance is not probable.
	We enter into agreements where revenue is derived from multiple deliverables including any mix of products and/or services.  For these arrangements, we determine whether the delivered item(s) has value to the customer on a stand-alone basis, and in the event the arrangement includes a general right of return relative to the delivered item(s), whether the delivery or performance of the undelivered item(s) is considered probable and substantially in our control.  If these criteria are met, the arrangement consideration is allocated to the separate units of accounting based on each unit’s relative selling price.  If these criteria are not met, the arrangement is accounted for as a single unit of accounting which would result in revenue being recognized ratably over the contract term or deferred until the earlier of when such criteria are met or when the last undelivered element is delivered. The amount of product and services revenue recognized for arrangements with multiple deliverables is impacted by the allocation of arrangement consideration to the deliverables in the arrangement based on the relative selling prices. In determining our selling prices, we apply the selling price hierarchy using vendor specific objective evidence (VSOE) when available, third-party evidence of selling price (“TPE”) if VSOE does not exist, and best estimated selling price (“BESP”) if neither VSOE nor TPE is available.
	VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for a deliverable when sold separately.  In determining VSOE, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range, generally evidenced by a substantial majority of such historical stand-alone transactions falling within a reasonably narrow range of the median rate. In addition, we consider major service groups, geographies, customer classifications, and other variables in determining VSOE.
	We are typically not able to determine TPE for our products or services. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality is difficult to obtain. Furthermore, we are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis.
	When we are unable to establish the selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. We determine BESP for a product or service by considering multiple factors including, but not limited to, cost of products, gross margin objectives, pricing practices, geographies, customer classes and distribution channels.
	We recognize revenue for delivered elements only when we determine there are no uncertainties regarding customer acceptance. Changes in the allocation of the sales price between delivered and undelivered elements can impact the timing of revenue recognized but does not change the total revenue recognized on any agreement.
	Professional Services Revenue - Fees collected for professional services, including website design and development, search engine optimization services, link-building, paid search management services, and telecom installation services are recognized as revenue, net of expected customer refunds, over the period during which the services are performed, based upon the value for such services.
	Web and Telecommunications Services Hosting Revenue - Fees collected for hosting revenue are recognized ratably as services are provided.  Customers are billed for these services on a monthly or annual basis at the customer’s option.  We recognize revenue ratably over the applicable service period.  When we provide a free trial period, we do not begin to recognize subscription revenue until the trial period has ended and the customer has been billed for the services.
	Equipment Sales and Financing Revenue - Fees generated from the sale of telecommunications equipment are recognized when the devices are installed and hosted telecommunications services begin.
	Fees generated from renting our hosted telecommunication equipment (IP or cloud telephone devices) through leasing contracts are recognized as revenue based on whether the lease qualifies as an operating lease or sales-type lease.  The two primary accounting provisions which we use to classify transactions as sales-type or operating leases are: 1) lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and 2) the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. The economic life of most of our products is estimated to be three years, since this represents the most frequent contractual lease term for our products, and there is no residual value for used equipment. Residual values, if any, are established at the lease inception using estimates of fair value at the end of the lease term. The vast majority of our leases that qualify as sales-type leases are non-cancelable and include cancellation penalties approximately equal to the full value of the lease receivables. Leases that do not meet the criteria for sales-type lease accounting are accounted for as operating leases. Revenue from sales-type leases is recognized upon installation and the interest portion is deferred and recognized as earned.  Revenue from operating leases in recognized ratably over the applicable service period.
	Commission Revenue - We have affiliate agreements with third-party entities that are resellers of satellite television services and internet service provider bandwidth. We receive commissions when the services are bundled with our hosted service offerings.
	Cost of Revenue – Cost of Hosted Telecommunications Service revenue primarily consists of fees we pay to third-party telecommunications and business internet providers, personnel costs related to system implementation, customer service and travel costs related to system implementation, and the costs associated with the purchase of phones and other third party equipment. Cost of Web Services revenue consists primarily of salaries and outsourcing fees related to fulfillment of our web services and customer service costs.
	Prepaid Sales Commissions - For arrangements where we recognize revenue over the relevant contract period, we defer related commission payments to our direct sales force and amortize these amounts over the same period that the related revenues are recognized.  This is done to match commissions with the related revenues.  Commission payments are nonrefundable unless amounts due from a customer are determined to be uncollectible or if the customer subsequently changes or terminates the level of service, in which case commissions which were paid are recoverable by us.  Prepaid sales commissions were as follows:
			December 31,			December 31,
			2014			2013
	Prepaid sales commissions		$	424,000		$	189,000
	Accumulated amortization			(116,000	)		(13,000	)
	Prepaid sales commissions, net		$	308,000		$	176,000
	We amortized commission expense of $103,000 and $13,000 for the years ended December 31, 2014 and 2013, respectively.
	Research and Development - Research and development costs are expensed as incurred. Costs related to internally developed software are expensed as research and development expense until technological feasibility has been achieved, after which the costs are capitalized.
	Fair Value Measurements - The fair value of our financial assets and liabilities was determined based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
	Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.
	Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
	·       Quoted prices for similar assets or liabilities in active markets;
	·       Quoted prices for identical or similar assets in non-active markets;
	·       Inputs other than quoted prices that are observable for the asset or liability; and
	·       Inputs that are derived principally from or corroborated by other observable market data.
	Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.  These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
	Income Taxes - We recognize a liability or asset for the deferred tax consequences of all temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Accruals for uncertain tax positions are provided for in accordance with accounting guidance. Accordingly, we may recognize the tax benefits from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accounting guidance is also provided on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations, and cash flows.  In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future taxable income and the existence of prudent and feasible tax planning strategies.  We have placed a full valuation allowance on net deferred tax assets, see Note 12.
	Interest and penalties associated with income taxes are classified as income tax expense in the consolidated statements of operations.
	We do not intend to indefinitely reinvest the undistributed earnings of our United Kingdom subsidiary, therefore, we have provided for U.S. deferred income taxes on such undistributed foreign earnings.  All other foreign subsidiaries are considered disregarded foreign entities for US tax purposes.
	Stock-Based Compensation - For equity-classified awards, compensation expense is recognized over the requisite service period based on the computed fair value on the grant date of the award.  Equity classified awards include the issuance of stock options.
	Comprehensive Loss – There were no other components of comprehensive loss other than net loss for the years ended December 31, 2014 and 2013.
	Operating Segments - Accounting guidance establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in financial reports issued to stockholders. The Company has two operating segments, which consist of Hosted Telecommunications Services and Web Services. Research and development expenses are allocated to Hosted Telecommunications Services and Web Services segments based on the level of effort, measured primarily by wages and benefits attributed to our engineering department.  Indirect sales and marketing expenses are allocated to the Hosted Telecommunications Services and Web Services segments based on level of effort, measured by month-to-date contract bookings.  General and administrative expenses are allocated to both segments based on revenue recognized for each segment.  Accounting guidance also establishes standards for related disclosure about products and services, geographic areas and major customers. We generate over 90% of our total revenue from customers within North America (United States and Canada) and less than 10% of our total revenues from customers in other parts of the world.
	Significant Customers – No customer accounted for 10% or more of our total revenue or total accounts receivable as of and for the years ended December 31, 2014 and 2013.
	Recently Adopted Accounting Guidance - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.
	In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements.
	In August 2014, the FASB issued ASU 2014-15. This ASU requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the ASU (1) provides a definition of the term substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering the mitigating effect of management’s plans, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) requires an express statement and other disclosures when substantial doubt is not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). This standard is effective for the fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

2_Net_Loss_Per_Common_Share

2. Net Loss Per Common Share	12 Months Ended
	Dec. 31, 2014
Net Loss Per Common Share
2. Net Loss Per Common Share	Basic net loss per common share is computed by dividing the net loss for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all dilutive common stock equivalents, consisting of common stock options and warrants. Diluted net loss per common share for the year ended December 31, 2014 and 2013 is the same as basic net loss per common share because the common share equivalents were anti-dilutive. The following table sets forth the computation of basic and diluted net loss per common share:
		Year Ended December 31,
		2014			2013
	Net loss (in thousands)	$	(6,376	)	$	(4,963	)
	Weighted-average share reconciliation:
	Weighted-average shares outstanding		11,163,592			10,714,353
	Weighted-average basic shares outstanding		11,163,592			10,714,353
	Diluted shares outstanding		11,163,592			10,714,353
	Net loss per common share:
	Basic	$	(0.57	)	$	(0.46	)
	Diluted	$	(0.57	)	$	(0.46	)
	Common stock equivalent shares are not included in the computation of diluted loss per share, because the Company has a net loss and the inclusion of such shares would be anti-dilutive due to the net loss. At December 31, 2014 and 2013, the common stock equivalent shares were, as follows:
		Year Ended December 31,
		2014			2013
	Shares of common stock issuable under equity incentive plans outstanding		2,147,561			2,130,239
	Shares of common stock issuable upon conversion of warrants		500,000			-
	Common stock equivalent shares excluded from diluted net loss per share		2,647,561			2,130,239

3_Acquisitions

3. Acquisitions	12 Months Ended
	Dec. 31, 2014
Acquisitions
3. Acquisitions	One Stop Tech Solutions, LLC Acquisition
	On June 1, 2014, we acquired certain assets from One Stop Tech Solutions, LLC, dba One Stop Voice (OSV), a privately-held provider of IP Telecom and Cloud communications located in Scottsdale, Arizona. The aggregate purchase price of approximately $540,000 consisted of $195,000 of cash paid at closing and 40,521 shares of our common stock with an estimated fair value of approximately $134,000. The fair value of the issuance of common stock issued as consideration for OSV was determined on the basis of the closing market price of the Company’s common stock on the acquisition date. In addition, the Company recorded as part of the purchase price approximately $211,000 of contingent consideration it estimates will be paid during the earn-out period. The contingent consideration of $211,000 will be paid out in cash and stock at a split of 60% cash and 40% stock.  The Company’s consolidated financial statements include the results of operations of OSV from the date of acquisition. The historical results of operations of OSV were not significant to the Company’s consolidated results of operations for the periods presented. The total purchase consideration was allocated to the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition, as determined by management based on a valuation performed by an independent third party valuation firm.  The excess of the purchase price over the amounts allocated to assets acquired and liabilities assumed has been recorded as goodwill.  The goodwill arising from the acquisitions discussed above consists largely of the synergies and economies of scale we hope to achieve from combining the acquired assets and operations with our historical operations.  In accordance with current accounting standards, goodwill associated with the OSV acquisition will not be amortized and will be tested for impairment at least annually.
	The following table presents the purchase price allocation of OSV (in thousands):
	Consideration (including estimated unpaid contingent consideration):
	Cash	$	195
	Common stock		134
	Contingent consideration		211
	Total consideration	$	540
	Recognized amounts of identifiable assets acquired and liabilities assumed:
	Identifiable intangible assets	$	353
	Commission liability		(10	)
	Total identifiable net assets		343
	Goodwill		197
	Total consideration	$	540
	The following were the identified intangible assets acquired and the respective estimated periods over which such assets will be amortized (in thousands):
	Intangible Assets:	Amount			Weighted Average useful
					life (in years)
	Customer relationships	$	335			7
	Technology		18			3
	Total intangible assets	$	353
	In determining the purchase price allocation, the Company considered, among other factors, its intention to use the acquired assets and the historical and estimated future demand for One Stop Voice services. The estimated fair value of customer relationships was based upon the income approach. The income approach relies on an estimation of the present value of the future monetary benefits expected to flow to the owner of an asset during its remaining economic life. This approach requires a projection of the cash flow that the asset is expected to generate in the future. The projected cash flow is discounted to its present value using a rate of return, or discount rate that accounts for the time value of money and the degree of risk inherent in the asset. The income approach may take the form of a “relief from royalty” methodology, a cost savings methodology, a “with and without” methodology, or excess earnings methodology, depending on the specific asset under consideration.
	The relief from royalty approach was used to determine the fair value of the technology license acquired from One Stop Voice.  The relief from royalty approach estimates the value of the intangible asset by quantifying the aggregate expenditures that would be required to replace the intangible asset.  The customer relationships were valued using a form of the income approach known as the multi-period excess earnings method. Inherent in the multi-period excess earnings method is the recognition that, in most cases, all of the assets of the business, both tangible and intangible, contribute to the generation of the cash flow of the business and the net cash flows attributable to the subject asset must recognize the support of the other assets which contribute to the realization of the cash flows. This future cash flow was then discounted using an estimated required rate of return for the asset to determine the present value of the future cash flows attributable to the asset. The key assumptions used in valuing the customer relationships acquired are as follows: discount rate of 12.5%, tax rate of 39.3%, contributory asset charges for technology license and tangible assets used to deliver services, assembled workforce, and estimated economic life of 7 years.
	The total weighted average amortization period for the identified intangible assets acquired from One Stop Voice is 7 years. The goodwill resulting from the One Stop Voice acquisition is not currently deductible for income tax purposes.
	PBX Holdings, LLC. Acquisition
	On June 4, 2013 we acquired certain assets from PBX Holdings, LLC., dba PBX Central, a privately-held provider of IP Telecom and Cloud communications located in Austin, Texas. The aggregate purchase price of approximately $770,000 consisted of $300,000 of cash paid at closing and 38,516 shares of our common stock with an estimated fair value of approximately $107,000. The fair value of the issuance of common stock issued as consideration for PBX Central was determined on the basis of the closing market price of the Company’s common stock on the acquisition date. In addition, the Company recorded as part of the purchase price approximately $363,000 of contingent consideration. The estimated additional payment obligation is comprised of approximately $87,000 of cash consideration and 115,385 shares of the Company’s common stock with an estimated value of approximately $276,000 at the time of the acquisition.  The Company’s consolidated financial statements include the results of operations of PBX Central from the date of acquisition and were accounted for as an acquisition of a business. The historical results of operations of PBX Central were not significant to the Company’s consolidated results of operations for the periods presented. The total purchase consideration was allocated to the assets acquired and liabilities assumed at their estimated fair values as of the date of acquisition.  The excess of the purchase price over the amounts allocated to assets acquired and liabilities assumed has been recorded as goodwill. In accordance with current accounting standards, goodwill associated with the PBX Central acquisition will not be amortized and will be tested for impairment at least annually.
	During the third quarter of 2013, the Company completed the valuation of the intangible assets acquired.  The final assessment resulted in no changes to the amounts recorded.  The following table presents the final allocation of the purchase price for PBX Central (in thousands):
	Consideration (including estimated unpaid contingent consideration):
	Cash	$	300
	Common stock		107
	Contingent consideration		363
	Total consideration	$	770
	Recognized amounts of identifiable assets acquired and liabilities assumed:
	Property and equipment	$	7
	Identifiable intangible assets		688
	Total identifiable net assets		695
	Goodwill		75
	Total consideration	$	770
	The following were the identified intangible assets acquired and the respective estimated periods over which such assets will be amortized (in thousands):
		Amount			Weighted Average useful
					life (In years)
	Technology	$	180			2
	Customer relationships		508			10
	Total	$	688
	In determining the purchase price allocation, the Company considered, among other factors, its intention to use the acquired assets and the historical and estimated future demand for PBX Central services. The estimated fair value of customer relationships was based upon the income approach. The income approach relies on an estimation of the present value of the future monetary benefits expected to flow to the owner of an asset during its remaining economic life. This approach requires a projection of the cash flow that the asset is expected to generate in the future. The projected cash flow is discounted to its present value using a rate of return, or discount rate that accounts for the time value of money and the degree of risk inherent in the asset. The income approach may take the form of a “relief from royalty” methodology, a cost savings methodology, a “with and without” methodology, or excess earnings methodology, depending on the specific asset under consideration.
	The cost approach was used to determine the fair value of the technology acquired from PBX Central.  The cost approach estimates the value of the intangible asset by quantifying the aggregate expenditures that would be required to replace the intangible asset.  Such expenditures include the developers’ time and materials.  The underlying assumption is that the cost to purchase or develop an asset is commensurate with the economic benefits the asset is expected to generate over its remaining economic life.  Management has estimated the cost to develop a similar product with current technology.  The key assumptions used in valuing the technology acquired are developers’ time and salary.
	The customer relationships were valued using a form of the income approach known as the multi-period excess earnings method. Inherent in the multi-period excess earnings method is the recognition that, in most cases, all of the assets of the business, both tangible and intangible, contribute to the generation of the cash flow of the business and the net cash flows attributable to the subject asset must recognize the support of the other assets which contribute to the realization of the cash flows. This future cash flow was then discounted using an estimated required rate of return for the asset to determine the present value of the future cash flows attributable to the asset. The key assumptions used in valuing the customer relationships acquired are as follows: discount rate of 18%, tax rate of 38.1%, contributory asset charges for technology license and tangible assets used to deliver services, and estimated economic life of 10 years.
	The total weighted average amortization period for the identified intangible assets acquired from PBX Central is 6 years. The goodwill resulting from the PBX Central acquisition is not currently deductible for income tax purposes.
	At December 31, 2013, the Company updated the cash flow forecast using actual results for the period June 1, 2013 through December 31, 2013, and determined a re-measurement was necessary to adjust the fair value of the contingent consideration.   The contingent consideration comprised of 25% cash and 75% common stock.  The cash contingent consideration recorded as a liability at the acquisition date fair value of $87,000 was reduced by $14,000. As the common stock contingent consideration was recorded as equity at the acquisition date fair value of $276,000, no re-measurement was necessary.  During the quarter ended September 30, 2014, management finalized the earn-out calculation for the final payout of contingent consideration.  The cash contingent consideration classified as liability was increased by $3,000 and the stock consideration was increased by $2,000.  The liability change in fair value was recognized in general and administrative expenses.  The stock contingent consideration change in fair value was accounted for within equity.  The sellers received cash of $76,000 and stock of $278,000 for total contingent consideration of $354,000.

4_Trade_Receivables_net

4. Trade Receivables, net	12 Months Ended
	Dec. 31, 2014
Trade Receivables Net
4. Trade Receivables, net	Our trade receivables balance consists of traditional trade receivables and residual Extended Payment Term Agreements (EPTAs) sold prior to July 2011.  Below is an analysis of the days outstanding of our trade receivables as shown on our balance sheet (in thousands):
		December 31,
		2014			2013
	Trade receivables	$	433		$	688
	Conforming EPTAs		192			577
	Non-Conforming EPTAs:
	1 - 30 days		19			68
	31 - 60 days		28			30
	61 - 90 days		3			43
	Gross trade receivables		675			1,406
	Less: allowance for doubtful accounts		(68	)		(200	)
	Trade receivables, net	$	607		$	1,206
	Current trade receivables, net	$	543		$	1,090
	Long-term trade receivables, net		64			116
	Trade receivables, net	$	607		$	1,206
	All current and long-term EPTAs in the table above had original contract terms of greater than one year.  The Company wrote off $158,000 and $1,027,000 of EPTAs during the years ended December 31, 2014 and 2013 respectively, of which, all had original contract terms of greater than one year.

5_Equipment_Financing_Receivab

5. Equipment Financing Receivables	12 Months Ended
	Dec. 31, 2014
Equipment Financing Receivables
5. Equipment Financing Receivables	We rent certain hosted telecommunication equipment (IP telephone devices) through leasing contracts that we classify as either operating leases or sale-type leases.  Equipment finance receivables arising from the rental of our hosted telecommunications equipment through sales-type leases, were as follows (in thousands):
		December 31,
		2014			2013
	Gross financing receivables	$	1,610		$	1,369
	Less unearned income		(984	)		(877	)
	Financing receivables, net		626			492
	Less: Current portion of finance receivables, net		(171	)		(94	)
	Finance receivables due after one year	$	455		$	398
	Equipment finance receivables are expected to be collected over the next thirty-six to sixty months.

6_Property_and_Equipment

6. Property and Equipment	12 Months Ended
	Dec. 31, 2014
Property And Equipment
6. Property and Equipment	Property and equipment consisted of the following (in thousands):
		December 31,
		2014			2013
	Software	$	1,183		$	1,180
	Computers and office equipment		1,790			1,785
	Land		-			877
	Building		-			765
	Building improvements		-			758
	Leasehold improvements		8			8
	Furniture and fixtures		4			124
	Less accumulated depreciation and amortization		(2,917	)		(3,302	)
	Total property and equipment, net	$	68		$	2,195

7_Intangible_Assets

7. Intangible Assets	12 Months Ended
	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
7. Intangible Assets	The net carrying amount of intangible assets is as follows (in thousands):
		December 31,
		2014			2013
	Customer relationships	$	941		$	606
	Technical know-how		60			60
	Non-compete		60			60
	Developed technology		198			180
	Less accumulated amortization
	Customer relationships		(316	)		(163	)
	Technical know-how		(60	)		(60	)
	Non-compete		(60	)		(60	)
	Developed technology		(147	)		(52	)
	Total	$	676		$	571
	The following table outlines the estimated future amortization expense related to intangible assets held at December 31, 2014 (in thousands):
	Year ending December 31,
	2015	$	209
	2016		131
	2017		97
	2018		72
	2019		53
	Thereafter		114
	Total	$	676

8_Goodwill

8. Goodwill	12 Months Ended
	Dec. 31, 2014
Goodwill Tables
Goodwill	The Company has recorded goodwill as a result of its business acquisitions. Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified tangible and intangible assets acquired. In each of the Company’s acquisitions, the objective of the acquisition was to expand the Company’s product offerings and customer base and to achieve synergies related to cross selling opportunities, all of which contributed to the recognition of goodwill
	The Company tests goodwill for impairment on an annual basis or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2013 were as follows:
		Acquisition Related Goodwill
	Balance at December 31, 2012	$	265
	Goodwill impairment - CastleWave		(265	)
	Additions - PBX Central		75
	Balance at December 31, 2013	$	75
	Additions - OSV		197
	Balance at December 31, 2014	$	272

9_Fair_Value_Measurements

9. Fair Value Measurements	12 Months Ended
	Dec. 31, 2014
Fair Value Measurements
9. Fair Value Measurements	We have financial instruments as of December 31, 2014 and 2013 for which the fair value is summarized below (in thousands):
		31-Dec-14								31-Dec-13
		Carrying Value				Estimated Fair Value				Carrying Value		Estimated Fair Value
	Assets:
	Trade receivables, net	$	607			$	607			$	1,206	$	1,190
	Equipment financing receivables		626				626				492		492
	Certificate of deposit		251				251				250		250
	Liabilities:
	Acquisition related contingent consideration	$	211			$	211			$	51	$	51
	Assets and liabilities for which fair value is recognized in the balance sheet on a recurring basis are summarized below as of December 31, 2014 and 2013 (in thousands):
						Fair value measurement at reporting date
	Description	As of December 31,				Level 1				Level 2		Level 3
		2014
	Assets:
	Certificate of deposit	$	251			$	-			$	251	$	-
	Liabilities:
	Acquisition related contingent consideration		211				-				-		211
	Description	As of December 31, 2013				Level 1				Level 2		Level 3
	Assets:
	Certificate of deposit	$	250			$	-			$	250	$	-
	Liabilities:
	Acquisition related contingent consideration		51				-				-		51
	The carrying amount of certificates of deposit approximates fair value, as determined by certificates of deposit with similar terms and conditions.
	The recurring Level 3 measurement of our contingent consideration liability includes the following significant unobservable inputs at December 31, 2014 and 2013, respectively (in thousands):
	Contingent consideration liability	Fair Value at December 31, 2014			Valuation technique	Unobservable inputs		Range
	Revenue - based payments	$	211		Discounted cash flow	Discount Rate			12.5	%
						Probability of milestone payment			90	%
						Projected year of payments			2014 - 2015
	Contingent consideration liability	Fair Value at December 31, 2013			Valuation technique	Unobservable inputs		Range
	Revenue - based payments	$	51		Discounted cash flow	Discount Rate			17.9	%
						Probability of milestone payment			90	%
						Projected year of payments			2014
	Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value.  Future changes in fair value of the contingent financial milestone consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the statement of operations and balance sheet in the period of the change.
	The progression of the Company’s Level 3 instruments fair valued on a recurring basis for the year ended December 31, 2014 are shown in the table below (in thousands):
		Acquisition Related Contingent Consideration
	Balance at December 31, 2012	$	-
	Purchases, sales and settlements, net		87
	Cash payments		(23	)
	Fair value adjustment		(13	)
	Balance at December 31, 2013	$	51
	Change in fair value		3
	Cash payments		(54	)
	Additions		211
	Balance at December 31, 2014	$	211

10_Equity

10. Equity	12 Months Ended
	Dec. 31, 2014
Equity [Abstract]
Equity	Common Stock
	In July 2013, the Company’s Certificate of Incorporation with the State of Delaware was amended to reduce the aggregate number of shares authorized for issuance from 100,000,000 to 25,000,000.  Shares of common stock reserved for future issuance as of December 31, 2014 were as follows:
	Common stock warrants	500,000
	Stock-based compensation plans:
	Outstanding option awards	2,147,561
	Available for future grants	3,555,434
		6,202,995
	Warrants
	On December 23, 2014, the Company entered into a stock purchase agreement with a major shareholder and CEO of the Company, whereby 1,449,275 shares of the Company’s common stock were sold at an aggregate purchase price of $2,000,000.  In connection with the Stock Purchase Agreement, warrants to purchase 500,000 shares of the Company’s common stock at a price of $1.38 per share were provided to the purchaser. The warrants contain standard limitations and representations and are exercisable for a period of five years from the date of the stock purchase agreement. Further, for a period of two years from the date of the agreement, the Company shall be entitled to require the purchaser to exercise up to 500,000 of the warrants, upon it determining that it requires cash to meet liquidity needs. The warrants are legally detachable and separately exercisable.  In addition, the warrants require the Company to transfer a fixed number of shares at the stated price at inception of the contract and the holder is exposed to risk and rewards similar to those of an owner. As a result, the proceeds from the stock purchase agreement were allocated to stockholders’ equity and the warrants based on the relative fair value of the instruments, resulting in stock option expense of $265,000 being recorded, with a corresponding increase to additional paid-in-capital as part of stockholders’ equity.  Fair value of the warrants was calculated using the Black-Scholes option-pricing model with the following assumptions:
	Expected volatility	55	%
	Expected life (in years)	5
	Risk-free interest rate	1.76	%
	Expected dividend yield	0	%

11_StockBased_Compensation

11. Stock-Based Compensation	12 Months Ended
	Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
11. Stock-Based Compensation	We have various incentive stock-based compensation plans that provide for the grant of stock options, restricted stock, and other share-based awards of up to 5,702,995 shares to eligible employees, consultants, and directors. As of December 31, 2014, we had 3,555,434 shares remaining in the plans available to grant.
	The following table summarizes the statement of operations effect of stock-based compensation for the years ended December 31, 2014 and 2013 (in thousands):
			Year Ended December 31,
			2014			2013
	Share based compensation expense by financial statement line item:
	Cost of revenue		$	25		$	12
	Research and development			129			105
	Selling and marketing			64			76
	General and administrative			566			615
	Total cost related to share-based compensation expense		$	784		$	808
	Total cost allocated to share-based compensation expense related to warrants issued during the year ended December 31, 2014 was $265,000 (Note 10).
	There is no tax benefit related to stock compensation expense due to a full valuation allowance on net deferred tax assets at December 31, 2014 and 2013, respectively.
	Stock Options
	The weighted-average fair value of stock options on the date of grant and the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2014 and 2013 using the Black-Scholes option-pricing model were as follows:
			Year Ended December 31,			Year Ended December 31,
			2014			2013
	Weighted-average fair value of options and warrants granted		$	1.01		$	1.13
	Expected volatility			55	%		59	%
	Expected life (in years)			4.6			4
	Risk-free interest rate			1.65	%		0.85	%
	Expected dividend yield			0	%		0	%
	The expected volatility of the options is determined using historical volatilities based on historical stock prices. The expected life of the options granted is based on our historical share option exercise experience. The risk-free interest rate is determined using the yield available for zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. Expected dividend yield is based on our announced dividends each period during the term of the option.
	The following table summarizes the stock option activity for all plans for the years ended December 31, 2014 and 2013:
						Weighted-Average	Aggregate
				Weighted-Average		Remaining	Intrinsic Value
		Number of Shares		Exercise Price		Contract Life	(in thousands)
	Outstanding at January 1, 2013	1,738,860		$	4.61	8.4 years	$            52
	Granted	745,000			2.49
	Exercised	(67,832)			2.69
	Cancelled/forfeited	(285,789)			4.45
	Outstanding at December 31, 2013	2,130,239			3.96	8.0 years	482
	Granted	498,000			3.18
	Exercised	(28,418)			2.44
	Cancelled/forfeited	(452,260)			4.05
	Outstanding at December 31, 2014	2,147,561			3.78	6.9 years	-
	Shares vested and expected to vest	1,949,592			3.78	6.9 years	-
	Exercisable as of December 31, 2014	1,351,894			4.18	6.6 years	-
	Exercisable as of December 31, 2013	1,080,589			4.67	7.3 years	113
	The total intrinsic value of options exercised during the years ended December 31, 2014 and 2013, was $21,000 and $133,000 respectively.
	As of December 31, 2014, the total future compensation expense related to non-vested options not yet recognized in the consolidated statements of operations was approximately $1,045,000 and the weighted-average period over which these awards are expected to be recognized is approximately 1.9 years.

12_Income_Taxes

12. Income Taxes	12 Months Ended
	Dec. 31, 2014
Income Taxes
12. Income Taxes	The income tax benefit consisted of the following for the years ended December 31, 2014 and 2013 (in thousands):
		Year Ended December 31,			Year Ended December 31,
		2014			2013
	Current income tax expense/(benefit):
	Federal	$	-		$	(259	)
	State and local		77			59
	Foreign		-			(57	)
	Current income tax expense/(benefit)	$	77		$	(257	)
	There was no deferred income tax expense (benefit) for the years ended December 31, 2014 and 2013.
	The income tax provision attributable to loss before income tax benefit for the years ended December 31, 2014 and 2013 differed from the amounts computed by applying the U.S. federal statutory tax rate of 34.0% as a result of the following (in thousands):
		Year Ended December 31,			Year Ended December 31,
		2014			2013
	U.S. federal statutory income tax benefit	$	(2,142	)	$	(1,775	)
	Increase (decrease) in income tax benefit resulting from:
	State and local income tax benefit, net of federal effect		104			130
	Change in the valuation allowance for net deferred income tax assets		2,036			1,551
	Uncertain tax positions		-			(253	)
	Other, net		79			90
	Income tax expense/(benefit)	$	77		$	(257	)
	As of December 31, 2014 and 2013, significant components of net deferred income tax assets and liabilities were as follows (in thousands):
		As of December 31, 2014						As of December 31, 2013
		Current			Non-current			Current			Non-current
	Deferred income tax assets:
	Accrued expenses	$	302		$	-		$	243		$	-
	Deferred revenue		230			-			293			-
	Net operating loss carry-forwards		-			7,132			-			5,182
	Foreign tax credits		-			892			-			892
	Stock-based compensation		-			2,895			-			2,568
	Property and equipment		-			118			-			223
	Other		-			708			-			706
	Subtotal		532			11,745			536			9,571
	Valuation allowance		(511	)		(11,364	)		(512	)		(9,327	)
	Total deferred income tax assets		21			381			24			244
	Deferred income tax liabilities:
	Property and equipment		-			-			-			-
	Prepaid expenses and other		(402	)		-			(268	)		-
	Total deferred income tax liabilities		(402	)		-			(268	)		-
	Net deferred income tax assets (liabilities)	$	(381	)	$	381		$	(244	)	$	244
	During the fiscal year ended June 30, 2002 (our fiscal year was subsequently changed to December 31), we experienced a change in ownership, as defined by the Internal Revenue Code, as amended (the “Code”) under Section 382.  A change of ownership occurs when ownership of a company increases by more than 50 percentage points over a three-year testing period of certain stockholders.  As a result of this ownership change we determined that our annual limitation on the utilization of our federal net operating loss (“NOL”) carry-forwards is approximately $461,000 per year.  We will only be able to utilize $5,761,000 of our pre-ownership change NOL carry-forwards and will forgo utilizing $14,871,000 of our pre-ownership change NOL carry-forwards as a result of this ownership change.  We do not account for forgone NOL carryovers in our deferred tax assets and only account for the NOL carry-forwards that will not expire unutilized as a result of the restrictions of Code Section 382.
	As of December 31, 2014, we had NOL, research and development, and foreign tax credit carry-forwards for U.S. federal income tax reporting purposes of approximately $18,861,000, $129,000 and $892,000 respectively.  The NOLs will begin to expire in 2020 through 2034, the research and development credits will begin to expire in 2019 through 2020, and the foreign tax credits will expire in 2017, if not utilized.
	We also have state NOL and research and development credit carry-forwards of approximately $7,695,000 and $61,000 which expire on specified dates as set forth in the rules of the various states to which the carry-forwards relate.
	We also have foreign NOL carry-forwards of approximately $710,000 which expire on specified dates as set forth in the rules of the various countries in which the carry-forwards relate.
	In assessing the recovery of the deferred tax assets, we considered whether it is more likely than not that some portion or all of our deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible.  We considered the scheduled reversals of future deferred tax liabilities, projected future taxable income, the suspension of the sale of product and services through the direct mail seminar sales channel for our Web Services segment, the restructuring of the Web Services division, and tax planning strategies in making this assessment.  As a result, we determined it was more likely than not that the deferred tax assets would not be realized as of December 31, 2014 and 2013; accordingly, we recorded a full valuation allowance.  The valuation allowance for deferred tax assets as of December 31, 2014 and 2013 was $11,875,000 and $9,839,000 respectively.
	The net change in our valuation allowance was an increase of $3,036,000 for the year ended December 31, 2014 and an increase of $1,551,000 for the year ended December 31, 2013.
	Accounting guidance clarifies the accounting for uncertain tax positions and requires companies to recognize the impact of a tax position in their financial statements, if that position is more likely than not of being sustained on audit, based on the technical merits of the position.
	Although we believe our estimates are reasonable, there can be no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. Such difference could have a material impact on our income tax provision and operating results in the period in which it makes such determination.
	There were no changes in the balance of unrecognized tax benefits during the years ended December 31, 2014 and 2013.
	Balance as of January 1, 2013	$	1,133
	Reductions due to lapsed statute of limitations		-242
	Balance as of December 31, 2013	$	891
	Reductions due to lapsed statute of limitations		-
	Balance as of December 31, 2014	$	891
	As of December 31, 2014, we had unrecognized tax benefits of $891,000, which if recognized, none would reduce our effective tax rate.
	Estimated interest and penalties related to the underpayment or late payment of income taxes are classified as a component of income tax provision (benefit) in the consolidated statements of operations. No accrued interest and penalties were accrued as of December  31, 2014 and 2013.
	Our U.S. federal income tax returns for fiscal 2011 through 2014 are open tax years. The IRS recently completed an audit of fiscal years 2005 through 2007. We also file in various state and foreign jurisdictions. With few exceptions, we are no longer subject to state and non-U.S. income tax examinations by tax authorities for years prior to fiscal 2010.

13_Prepaid_Expenses_and_Other

13. Prepaid Expenses and Other	12 Months Ended
	Dec. 31, 2014
Prepaid Expenses And Other
Prepaid Expenses and Other	Prepaid expenses consisted of the following (in thousands):
		December 31,
		2014		2013
	Current prepaid rent	$	322	$	-
	Prepaid commissions		308		176
	Other		402		444
	Total current prepaids	$	1,032	$	620
	Long-term prepaid rent		376		-
	Total prepaid and other

14_Accrued_Expenses

14. Accrued Expenses	12 Months Ended
	Dec. 31, 2014
AccruedExpensesAbstract
14. Accrued Expenses	Accrued expenses consisted of the following (in thousands):
		December 31,
		2014		2013
	Accrued wages and benefits	$	345	$	473
	Accrued accounts payable		318		70
	Accrued legal costs		231		202
	Accrued sales taxes		209		105
	Other		228		245
	Total accrued expenses	$	1,331	$	1,095
	Certain amounts in the prior year accrued expenses in the table above have been reclassified to conform to the 2014 presentation.

15_Commitments_and_Contingenci

15. Commitments and Contingencies	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
15. Commitments and Contingencies	Operating Leases
	We lease certain of our equipment and corporate offices under non-cancelable operating lease agreements expiring at various dates through 2016. The operating leases for our Reno, NV and Draper, UT offices contain customary escalation clauses. Future aggregate minimum lease obligations under operating leases as of December 31, 2014, exclusive of taxes and insurance, are as follows (in thousands):
	Years ending December 31,
	2015		119
	2016		92
	Total		$           211
	Rental expense for the year ended December 31, 2014 and 2013 was approximately $119,000 and $119,000, respectively.
	The following schedule shows the composition of total rental expense for all operating leases except those with terms of a month or less that were not renewed:
		Years ending December 31,
		2015		2016
	Minimum rentals	$             119		$               92
	Less: Sublease rentals	(107)		(92)
	Total	$               12		$               -
	Sale-Leaseback
	On February 28, 2014, the Company sold and leased back the land, building and furniture associated with the corporate headquarters in Tempe, Arizona to a company that is owned by the major shareholder and CEO of the Company for $2.0 million in cash.  The Company recognized a deferred gain of $281,000 on sale-leaseback, which will be amortized over the initial lease term of 36 months to offset rent expense.  The net deferred gain is included in other long-term liabilities in the condensed consolidated balance sheets as of December 31, 2014.
	The lease agreement called for rent payments for the initial three year term to be made in advance in the form of 300,000 shares of common stock of Crexendo, Inc.  The fair value price per share at the time of the lease was $3.22 per share, resulting in rent expense of $322,000 per year for three years.  Prepaid rent included in the condensed consolidated balance sheets as of December 31, 2014, is as follows:
	Current prepaid rent		$	322,000
	Long-term prepaid rent			376,000
	Total prepaid rent, net		$	698,000
	Rent expense incurred on the sale-leaseback, net of $78,000 deferred gain amortization, during the year ended December 31, 2014 and 2013 was $268,000 and $0, respectively.
	Legal Proceedings
	From time to time we receive inquiries from federal, state, city and local government officials as well as the FCC and taxing authorities in the various jurisdictions in which we operate. These inquiries and investigations related primarily to our discontinued seminar operations and concern compliance with various city, county, state, and/or federal regulations involving sales, representations made, customer service, refund policies, services and marketing practices. We respond to these inquiries and have generally been successful in addressing the concerns of these persons and entities, without a formal complaint or charge being made, although there is often no formal closing of the inquiry or investigation. There can be no assurance that the ultimate resolution of these or other inquiries and investigations will not have a material adverse effect on our business or operations, or that a formal complaint will not be initiated. We also receive complaints and inquiries in the ordinary course of our business from both customers and governmental and non-governmental bodies on behalf of customers, and in some cases these customer complaints have risen to the level of litigation. There can be no assurance that the ultimate resolution of these matters will not have a material adverse effect on our business or results of operations.
	On November 4, 2013, the Company received a motion for leave to file an amended complaint and a request for scheduling conference (including a request for extending discovery) in the case entitled Information Technology Customer Care, Inc., Plaintiff v StoresOnline, Inc., Defendant; filed in In The Fourth District Court, Utah County, and State Of Utah Case No. 090401169. In the original Complaint, Plaintiff ITCCI claimed that StoresOnline breached a contract with ITCCI by improperly moving its Philippine support to a new support center. ITCCI also alleged an action for tortious interference claiming that StoresOnline caused former employees of ITCCI to leave to work for that support center. There was also a claim for “civil conspiracy”. The original Complaint sought actual and punitive damages.
	The parties had completed discovery and filed various motions, including a motion for Summary Judgment by StoresOnline. The Company believes there was no evidence to support any of the claims raised by the Plaintiff, and that there was no contractual obligation which would have prohibited a change of support centers.
	The Plaintiff has filed motions to substitute new counsel, amend its Complaint and re-open discovery. The allegations included in the proposed Amended Complaint are that former officers and executives of StoresOnline acted fraudulently and secretly to improperly move support centers. The Company strongly disputes the allegations against it under both the original Complaint and the proposed Amended Complaint.  Moreover, even if any of the allegations regarding former employees in the proposed Amended Complaint were true, the Company believes that it would have no liability for those alleged actions.
	In November 2014 the parties attended a mediation where the case was settled. The Plaintiffs have dismissed the case with prejudice.
	We are also subject to various claims and legal proceedings covering matters that arise in the ordinary course of business. We believe that the resolution of these other cases will not have a material adverse effect on our business, financial position, or results of operations.
	We have recorded liabilities of approximately $231,000 and $202,000 as of December 31, 2014 and 2013, respectively, for estimated losses resulting from various legal proceedings in which we are engaged. Attorney’s fees associated with the various legal proceedings are expensed as incurred. We are also subject to various claims and legal proceedings covering matters that arise in the ordinary course of business. We believe that the resolution of these other cases will not have a material adverse effect on our business, financial position, or results of operations.

16_Employee_Benefit_Plan

16. Employee Benefit Plan	12 Months Ended
	Dec. 31, 2014
Employee Benefit Plan
16. Employee Benefit Plan	We have established a retirement savings plan for eligible employees. The plan allows employees to contribute a portion of their pre-tax compensation in accordance with specified guidelines. For the year ended December 31, 2014 and 2013, we contributed approximately $146,000 and $169,000 to the retirement savings plan, respectively.

17_Segments

17. Segments	12 Months Ended
	Dec. 31, 2014
Segments
17. Segments	Management has chosen to organize the Company around differences based on its products and services.  Hosted Telecommunications Services segment generates revenue from selling hosted telecommunication services and broadband internet services. Web Services segment generates revenue from website hosting, managing e-commerce or lead generation offerings, websites, search engine optimization/management and online promotional needs for small, medium, and enterprise  sized businesses.  The Company has two operating segments, which consist of Hosted Telecommunications Services and Web Services. Effective April 1, 2014, the Company changed its reporting segments to reflect changes in how the Chief Operating Decision Maker (CODM) internally measures performance and allocates resources. Historically, the Company reported StoresOnline as a separate segment which included cash collectives on extended payment term agreements (EPTA’s) and website hosting services for those customers , Now that EPTA’s are insignificant, the CODM reviews the website hosting services and web management services as one reportable segment, which is our web services segment. Segment operating results for the prior year have been revised to conform to current year segment operating results presentation. Segment revenue and income (loss) before income tax provision was as follows (in thousands):
		December 31,
		2014			2013
	Revenue:
	Hosted Telecommunications Services	$	4,297		$	2,370
	Web Services		3,297			7,958
	Consolidated revenue		7,594			10,328
	Loss from Operations:
	Hosted Telecommunications Services		(5,776	)		(5,432	)
	Web Services		(823	)		(313	)
	Total operating loss		(6,599	)		(5,745	)
	Other Income, net:
	Hosted Telecommunications Services		87			3
	Web Services		213			522
	Total other income		300			525
	Income/(Loss) before income tax provision
	Hosted Telecommunications Services		(5,689	)		(5,429	)
	Web Services		(610	)		209
	Loss before income tax provision	$	(6,299	)	$	(5,220	)
	Depreciation and amortization was $400,000 and $378,000 for the Hosted Telecommunications Services segment for the years ended December 31, 2014 and 2013, respectively. Depreciation and amortization was $263,000 and $767,000 for the Web Services segment for the years ended December 31, 2014 and 2013, respectively.
	Interest income was $152,000 and $502,000 for the Web Services segment for the years ended December 31, 2014 and 2013, respectively.
	Interest expense was $3,000 and $0 for the Hosted Telecommunications Services segment for the years ended December 31, 2014 and 2013, respectively.

18_Subsequent_Events

18. Subsequent Events	12 Months Ended
	Dec. 31, 2014
Subsequent Events [Abstract]
18. Subsequent Events	On January 13, 2015, the Company voluntarily delisted from the New York Stock Exchange MKT Exchange and began trading on the OTCQX Marketplace and our ticker symbol was changed to “CXDO”. The Company previously traded on the NYSE MKT exchange under the ticker symbol “EXE”.

19_Quarterly_Financial_Informa

19. Quarterly Financial Information (unaudited)	12 Months Ended
	Dec. 31, 2014
Quarterly Financial Information
19. Quarterly Financial Information (unaudited)				Year ended December 31, 2014
				For the three months ended
				March 31,				June 30,			September 30,			December 31,
				2014				2014			2014			2014
				(In thousands, except per share data)
	Revenue		$	2,072			$	1,808		$	1,725		$	1,989
	Operating expenses:
	Cost of revenue			930				884			790			978
	Selling and marketing			653				504			546			577
	General and administrative			1,750				1,548			1,549			1,880
	Research and development			414				435			394			361
	Goodwill impairment			-				-			-			-
	Total operating expenses			3,747				3,371			3,279			3,796
	Loss from operations			(1,675	)			(1,563	)		(1,554	)		(1,807	)
	Total other income			77				82			61			80
	Loss before income taxes			(1,598	)			(1,481	)		(1,493	)		(1,727	)
	Income tax benefit (provision)			(34	)			(13	)		(9	)		(21	)
	Net loss		$	(1,632	)		$	(1,494	)	$	(1,502	)	$	(1,748	)
	Basic net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.15	)
	Diluted net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.15	)
				Year ended December 31, 2013
				For the three months ended
				March 31,				June 30,			September 30,			December 31,
				2013				2013			2013			2013
				(In thousands, except per share data)
	Revenue		$	3,022			$	2,737		$	2,428		$	2,141
	Operating expenses:
	Cost of revenue			1,042				970			1,044			1,035
	Selling and marketing			908				717			712			718
	General and administrative (2)			1,438				1,852			1,745			1,935
	Research and development			481				414			396			401
	Goodwill impairment			-				-			265			-
	Total operating expenses			3,869				3,953			4,162			4,089
	Loss from operations			(847	)			(1,216	)		(1,734	)		(1,948	)
	Total other income			212				120			98			95
	Loss before income taxes			(635	)			(1,096	)		(1,636	)		(1,853	)
	Income tax benefit (provision)			237				26			(23	)		17
	Net loss		$	(398	)		$	(1,070	)	$	(1,659	)	$	(1,836	)
	Basic net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.17	)
	Diluted net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.17	)
	———————
	(1)	Net income (loss) per common share is computed independently for each of the quarters presented. Therefore, the sums of quarterly net income (loss) per common share amounts do not necessarily equal the total for the twelve month periods presented.
	-2	During the first quarter of the year ended December 31, 2013, we entered into a settlement and released $606,000 of the lease abandonment accrual.
	CREXENDO, INC. AND SUBSIDIARIES
	Schedule II- Valuation and Qualifying Accounts
	Year Ended December 31, 2014 and 2013
			Balance at										Balance at
			Beginning										End of
			of Year			Additions				Deductions			Year
						(in thousands)
	Year ended December 31, 2014
	Allowance for doubtful accounts receivable		$	200			$	-		$	(132	)	$	68
	Deferred income tax asset valuation allowance			9,839				2,039			-			11,878
	Year ended December 31, 2013
	Allowance for doubtful accounts receivable		$	1,522			$	-		$	(1,322	)	$	200
	Deferred income tax asset valuation allowance			8,288				1,551			-			9,839

1_Significant_Accounting_Polic1

1. Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2014
Significant Accounting Policies Policies
Description of Business	Crexendo, Inc. is incorporated in the state of Delaware. As used hereafter in the notes to consolidated financial statements, we refer to Crexendo, Inc. and its wholly owned subsidiaries, as “we,” “us,” or “our Company”. We are a hosted services company that provides web hosting, hosted telecommunications services, e-commerce software, website development software, and broadband internet services for businesses and entrepreneurs.  Our services are designed to make enterprise-class hosting services available to small, medium-sized and enterprise-sized businesses at affordable monthly rates.  The Company has two operating segments, which consist of Hosted Telecommunications Services and Web Services.
	The Company has transformed into a start-up company with the inherent risks and uncertainties of funding operations until profitability is achieved.  We currently plan to fund our operations during the next twelve months using our cash and cash equivalents of $2,906,000 and our cash flows from operations, which we believe based on forecasts will be sufficient.  However, the company has the ability to call outstanding warrants to provide additional liquidity for approximately $690,000, if needed.  In addition, if needed, the Company received a commitment from the CEO, and major shareholder, in February 2015 that he would provide up to $1,000,000 of financial support to enable the Company to fund its operations through March 31, 2016.  As such, the Company believes it will have sufficient funds to sustain its operations during the next twelve months as a result of the sources of funding detailed above.
Basis of Presentation	Basis of Presentation – The consolidated financial statements include the accounts and operations of Crexendo, Inc. and its wholly owned subsidiaries, which include Avail 24/7 Inc., Crexendo Business Solutions, Inc., StoresOnline Inc., StoresOnline International Canada ULC, StoresOnline International, Inc., StoresOnline International Ltd., Internet Training Group, Inc., Crexendo International, Inc., Crexendo Telecom, Inc., and Crexendo Property Management, LLC.   All intercompany account balances and transactions have been eliminated in consolidation.  The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These consolidated financial statements reflect the results of operations, financial position, changes in stockholders’ equity, and cash flows of our Company.
Cash and Cash Equivalents	Cash and Cash Equivalents - We consider all highly liquid, short-term investments with maturities of three months or less at the time of purchase to be cash equivalents. As of December 31, 2014, we had cash and cash equivalents in financial institutions in excess of federally insured limits in the amount of $2,487,000.
Restricted Cash	Restricted Cash – We classified $133,000 and $487,000 as restricted cash as of December 31, 2014 and 2013, respectively.  Cash is restricted for state licensing letters of credit and compensating balance requirements on merchant accounts, and purchasing card agreements.  As of December 31, 2014, we had restricted cash in financial institutions in excess of federally insured limits in the amount of $133,000.
Trade Receivables	Trade Receivables – We have historically offered to our web site development software customers the option to finance, typically through 24 and 36-month extended payment term arrangements (“EPTAs”), purchases made at our suspended Internet Training Workshops through our Web Services segment. EPTAs are reflected as short-term and long-term trade receivables, as applicable, as we have the intent and ability to hold the receivables for the foreseeable future, until maturity or payoff.  EPTAs are recorded on a nonaccrual cash basis beginning on the contract date. Trade receivables from our hosted telecommunications and web services segments are recorded at invoiced amounts.
Allowance for Doubtful Accounts	Allowance for Doubtful Accounts – For sales made through EPTA contracts, we record an allowance for doubtful accounts each reporting period based on the Company’s ongoing assessment of collectability. The allowance represents estimated losses resulting from customers’ failure to make required payments. The allowance for doubtful accounts for EPTAs is netted against the current and long-term trade receivables balances. The allowance estimate is based on historical collection experience, specific identification of probable bad debts based on collection efforts, aging of trade receivables, customer payment history, and other known factors, including current economic conditions. We believe that the allowance for doubtful accounts is adequate based on our assessment to date, however, actual collection results may differ materially from our expectations. Because revenue generated from customers financing through EPTAs is deferred and not recognized prior to the collection of cash, adjustments to the allowance for doubtful accounts related to our EPTA contracts increase or decrease deferred revenue. Trade receivables are written off against the allowance when the related customers are no longer making required payments and the trade receivables are determined to be uncollectible, typically 90 days past their original due date.  For sales made in our Hosted Telecommunications Services and Web Services segments, the allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine the allowance based on known troubled accounts, historical experience, and other currently available evidence.
Interest Income	Interest Income - Interest income is primarily earned from EPTA contracts. EPTA contract terms generally contain an 18% simple interest rate. Interest income is recognized on these accounts only to the extent cash is received as the receivables are generally 24 and 36-months in length and collection of the full amount of the receivable is not probable. We recognized interest income of $150,000 and $501,000 for the years ended December 31, 2014 and 2013, respectively.
Inventory	Inventory - Telecommunications equipment inventory is stated at the lower of cost (first-in, first-out method) or market.   In accordance with applicable accounting guidance, we regularly evaluate whether inventory is stated at the lower of cost or market.
Certificate of Deposit	Certificate of Deposit - We hold a $251,000 certificate of deposit as collateral for merchant accounts, which automatically renews every 12 months. The certificate of deposit is classified as long-term in the consolidated balance sheets.
Property and Equipment	Property and Equipment - Depreciation and amortization expense is computed using the straight-line method in amounts sufficient to allocate the cost of depreciable assets over their estimated useful lives ranging from two to five years. The cost of leasehold improvements is amortized using the straight-line method over the shorter of the estimated useful life of the asset or the term of the related lease. Depreciation and amortization expense is included in general and administrative expenses and totaled $415,000 and $1,022,000 for the year ended December 31, 2014 and 2013, respectively.  Depreciable lives by asset group are as follows:
	Computer software	3 years
	Furniture and fixtures	4 years
	Leasehold improvements	2 to 5 years
	Maintenance and repairs are expensed as incurred. The cost and accumulated depreciation of property and equipment sold or otherwise retired are removed from the accounts and any related gain or loss on disposition is reflected in net income or loss for the year.
Goodwill	Goodwill – Goodwill is tested for impairment using a fair-value-based approach on an annual basis (December 31) and between annual tests if indicators of potential impairment exist.  During the quarter ended September 30, 2013, the Company made a strategic decision to limit the sale of web services to our enterprise sized customers.  As this change significantly impacted revenue in our Web Services segment, the Company determined that the change was a triggering event requiring the Company to perform an impairment assessment to determine whether the carrying amount of the goodwill exceeded its fair value. In accordance with the accounting guidance, the Company performed the two-step goodwill impairment test and concluded that the goodwill related to CastleWave was impaired and recorded an impairment charge of $265,000 to eliminate the carrying value of the CastleWave goodwill.
Intangible Assets	Intangible Assets - Our intangible assets consist primarily of assets acquired in the acquisition of PBX Central and OSV, which include customer relationships and developed technology.  The fair value of identifiable intangible assets is based upon the lower of discounted future cash flow projections or the amount paid in an arm’s length transaction.  The intangible assets are amortized following the patterns in which the economic benefits are consumed.  Amortization expense from these acquired assets is included in general and administrative expenses and totaled $248,000 and $123,000 for the years ended December 31, 2014 and 2013, respectively.
	We periodically review the estimated useful lives of our intangible assets and review these assets for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The determination of impairment is based on estimates of future undiscounted cash flows. If an intangible asset is considered to be impaired, the amount of the impairment will be equal to the excess of the carrying value over the fair value of the asset.
Use of Estimates	Use of Estimates - In preparing the consolidated financial statements, management makes assumptions, estimates and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods.  Specific estimates and judgments include inventory valuation and obsolescence, valuation of goodwill and intangible assets in connection with business acquisitions, allowances for doubtful accounts, sales returns and allowances, uncertainties related to certain income tax benefits, valuation of deferred income tax assets, valuations of share-based payments and recoverability of long-lived assets.  Management’s estimates are based on historical experience and on our expectations that are believed to be reasonable.  The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from our current estimates and those differences may be material.
Revenue Recognition	Revenue Recognition - In general, we recognize revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the product or service has been provided to the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is probable.  We recognize revenue from our Hosted Telecommunications Services and Web Services segments on an accrual basis, with the exception of our EPTA cash receipts which are recognized on a cash basis.  Specifics to revenue category are as follows:
	Software licenses and DVD training courses sold under EPTAs are recognized as revenue upon receipt of cash from customers and not at the time of sale. Accounting standards require revenue to be deferred until customer payments are received if collection of the original principal balance is not probable.
	We enter into agreements where revenue is derived from multiple deliverables including any mix of products and/or services.  For these arrangements, we determine whether the delivered item(s) has value to the customer on a stand-alone basis, and in the event the arrangement includes a general right of return relative to the delivered item(s), whether the delivery or performance of the undelivered item(s) is considered probable and substantially in our control.  If these criteria are met, the arrangement consideration is allocated to the separate units of accounting based on each unit’s relative selling price.  If these criteria are not met, the arrangement is accounted for as a single unit of accounting which would result in revenue being recognized ratably over the contract term or deferred until the earlier of when such criteria are met or when the last undelivered element is delivered. The amount of product and services revenue recognized for arrangements with multiple deliverables is impacted by the allocation of arrangement consideration to the deliverables in the arrangement based on the relative selling prices. In determining our selling prices, we apply the selling price hierarchy using vendor specific objective evidence (VSOE) when available, third-party evidence of selling price (“TPE”) if VSOE does not exist, and best estimated selling price (“BESP”) if neither VSOE nor TPE is available.
	VSOE of fair value for elements of an arrangement is based upon the normal pricing and discounting practices for a deliverable when sold separately.  In determining VSOE, we require that a substantial majority of the selling prices fall within a reasonably narrow pricing range, generally evidenced by a substantial majority of such historical stand-alone transactions falling within a reasonably narrow range of the median rate. In addition, we consider major service groups, geographies, customer classifications, and other variables in determining VSOE.
	We are typically not able to determine TPE for our products or services. TPE is determined based on competitor prices for similar deliverables when sold separately. Generally, our offerings contain a significant level of differentiation such that the comparable pricing of products with similar functionality is difficult to obtain. Furthermore, we are unable to reliably determine what similar competitor products’ selling prices are on a stand-alone basis.
	When we are unable to establish the selling price using VSOE or TPE, we use BESP in our allocation of arrangement consideration. The objective of BESP is to determine the price at which we would transact a sale if the product or service were sold on a stand-alone basis. We determine BESP for a product or service by considering multiple factors including, but not limited to, cost of products, gross margin objectives, pricing practices, geographies, customer classes and distribution channels.
	We recognize revenue for delivered elements only when we determine there are no uncertainties regarding customer acceptance. Changes in the allocation of the sales price between delivered and undelivered elements can impact the timing of revenue recognized but does not change the total revenue recognized on any agreement.
Professional Services Revenue	Professional Services Revenue - Fees collected for professional services, including website design and development, search engine optimization services, link-building, paid search management services, and telecom installation services are recognized as revenue, net of expected customer refunds, over the period during which the services are performed, based upon the value for such services.
Web and Telecommunications Services Hosting Revenue	Web and Telecommunications Services Hosting Revenue - Fees collected for hosting revenue are recognized ratably as services are provided.  Customers are billed for these services on a monthly or annual basis at the customer’s option.  We recognize revenue ratably over the applicable service period.  When we provide a free trial period, we do not begin to recognize subscription revenue until the trial period has ended and the customer has been billed for the services.
Equipment Sales and Financing Revenue	Equipment Sales and Financing Revenue - Fees generated from the sale of telecommunications equipment are recognized when the devices are installed and hosted telecommunications services begin.
	Fees generated from renting our hosted telecommunication equipment (IP or cloud telephone devices) through leasing contracts are recognized as revenue based on whether the lease qualifies as an operating lease or sales-type lease.  The two primary accounting provisions which we use to classify transactions as sales-type or operating leases are: 1) lease term to determine if it is equal to or greater than 75% of the economic life of the equipment and 2) the present value of the minimum lease payments to determine if they are equal to or greater than 90% of the fair market value of the equipment at the inception of the lease. The economic life of most of our products is estimated to be three years, since this represents the most frequent contractual lease term for our products, and there is no residual value for used equipment. Residual values, if any, are established at the lease inception using estimates of fair value at the end of the lease term. The vast majority of our leases that qualify as sales-type leases are non-cancelable and include cancellation penalties approximately equal to the full value of the lease receivables. Leases that do not meet the criteria for sales-type lease accounting are accounted for as operating leases. Revenue from sales-type leases is recognized upon installation and the interest portion is deferred and recognized as earned.  Revenue from operating leases in recognized ratably over the applicable service period.
Commission Revenue	Commission Revenue - We have affiliate agreements with third-party entities that are resellers of satellite television services and internet service provider bandwidth. We receive commissions when the services are bundled with our hosted service offerings.
Cost of Revenue	Cost of Revenue – Cost of Hosted Telecommunications Service revenue primarily consists of fees we pay to third-party telecommunications and business internet providers, personnel costs related to system implementation, customer service and travel costs related to system implementation, and the costs associated with the purchase of phones and other third party equipment. Cost of Web Services revenue consists primarily of salaries and outsourcing fees related to fulfillment of our web services and customer service costs.
Prepaid Sales Commissions	Prepaid Sales Commissions - For arrangements where we recognize revenue over the relevant contract period, we defer related commission payments to our direct sales force and amortize these amounts over the same period that the related revenues are recognized.  This is done to match commissions with the related revenues.  Commission payments are nonrefundable unless amounts due from a customer are determined to be uncollectible or if the customer subsequently changes or terminates the level of service, in which case commissions which were paid are recoverable by us.  Prepaid sales commissions were as follows:
			December 31,			December 31,
			2014			2013
	Prepaid sales commissions		$	424,000		$	189,000
	Accumulated amortization			(116,000	)		(13,000	)
	Prepaid sales commissions, net		$	308,000		$	176,000
	We amortized commission expense of $103,000 and $13,000 for the years ended December 31, 2014 and 2013, respectively.
Research and Development	Research and Development - Research and development costs are expensed as incurred. Costs related to internally developed software are expensed as research and development expense until technological feasibility has been achieved, after which the costs are capitalized.
Fair Value Measurements	Fair Value Measurements - The fair value of our financial assets and liabilities was determined based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:
	Level 1 — Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.
	Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:
	·       Quoted prices for similar assets or liabilities in active markets;
	·       Quoted prices for identical or similar assets in non-active markets;
	·       Inputs other than quoted prices that are observable for the asset or liability; and
	·       Inputs that are derived principally from or corroborated by other observable market data.
	Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.  These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
Income Taxes	Income Taxes - We recognize a liability or asset for the deferred tax consequences of all temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the assets and liabilities are recovered or settled. Accruals for uncertain tax positions are provided for in accordance with accounting guidance. Accordingly, we may recognize the tax benefits from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Accounting guidance is also provided on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in the financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position, results of operations, and cash flows.  In assessing the need for a valuation allowance, we evaluate all significant available positive and negative evidence, including historical operating results, estimates of future taxable income and the existence of prudent and feasible tax planning strategies.  We have placed a full valuation allowance on net deferred tax assets, see Note 12.
	Interest and penalties associated with income taxes are classified as income tax expense in the consolidated statements of operations.
	We do not intend to indefinitely reinvest the undistributed earnings of our United Kingdom subsidiary, therefore, we have provided for U.S. deferred income taxes on such undistributed foreign earnings.  All other foreign subsidiaries are considered disregarded foreign entities for US tax purposes.
Stock-Based Compensation	Stock-Based Compensation - For equity-classified awards, compensation expense is recognized over the requisite service period based on the computed fair value on the grant date of the award.  Equity classified awards include the issuance of stock options.
Comprehensive Loss	Comprehensive Loss – There were no other components of comprehensive loss other than net loss for the years ended December 31, 2014 and 2013.
Operating Segments	Operating Segments - Accounting guidance establishes standards for the way public business enterprises are to report information about operating segments in annual financial statements and requires enterprises to report selected information about operating segments in financial reports issued to stockholders. The Company has two operating segments, which consist of Hosted Telecommunications Services and Web Services. Research and development expenses are allocated to Hosted Telecommunications Services and Web Services segments based on the level of effort, measured primarily by wages and benefits attributed to our engineering department.  Indirect sales and marketing expenses are allocated to the Hosted Telecommunications Services and Web Services segments based on level of effort, measured by month-to-date contract bookings.  General and administrative expenses are allocated to both segments based on revenue recognized for each segment.  Accounting guidance also establishes standards for related disclosure about products and services, geographic areas and major customers. We generate over 90% of our total revenue from customers within North America (United States and Canada) and less than 10% of our total revenues from customers in other parts of the world.
Significant Customers	Significant Customers – No customer accounted for 10% or more of our total revenue or total accounts receivable as of and for the years ended December 31, 2014 and 2013.
Recently Adopted Accounting Guidance	Recently Adopted Accounting Guidance - In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 that introduces a new five-step revenue recognition model in which an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU also requires disclosures sufficient to enable users to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative disclosures about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. This standard is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.
	In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU requires that a performance target that affects vesting and could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in ASC 718, Compensation-Stock Compensation, as it relates to such awards. ASU 2014-12 is effective for us in our first quarter of fiscal 2017 with early adoption permitted using either of two methods: (i) prospective to all awards granted or modified after the effective date; or (ii) retrospective to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter, with the cumulative effect of applying ASU 2014-12 as an adjustment to the opening retained earnings balance as of the beginning of the earliest annual period presented in the financial statements. The Company is currently assessing the impact of this pronouncement to its consolidated financial statements.
	In August 2014, the FASB issued ASU 2014-15. This ASU requires management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the ASU (1) provides a definition of the term substantial doubt, (2) requires an evaluation every reporting period including interim periods, (3) provides principles for considering the mitigating effect of management’s plans, (4) requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) requires an express statement and other disclosures when substantial doubt is not alleviated, and (6) requires an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). This standard is effective for the fiscal years ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

1_Significant_Accounting_Polic2

1. Significant Accounting Policies (Tables)	12 Months Ended
	Dec. 31, 2014
Property and Equipment			December 31,
			2014			2013
	Software		$	1,183		$	1,180
	Computers and office equipment			1,790			1,785
	Land			-			877
	Building			-			765
	Building improvements			-			758
	Leasehold improvements			8			8
	Furniture and fixtures			4			124
	Less accumulated depreciation and amortization			(2,917	)		(3,302	)
	Total property and equipment, net		$	68		$	2,195
Useful Life
Property and Equipment	Computer software	3 years
	Furniture and fixtures	4 years
	Leasehold improvements	2 to 5 years

2_Net_Loss_Per_Common_Share_Ta

2. Net Loss Per Common Share (Tables)	12 Months Ended
	Dec. 31, 2014
Net Loss Per Common Share
Basic and diluted net income (loss) per common share		Year Ended December 31,
		2014			2013
	Net loss (in thousands)	$	(6,376	)	$	(4,963	)
	Weighted-average share reconciliation:
	Weighted-average shares outstanding		11,163,592			10,714,353
	Weighted-average basic shares outstanding		11,163,592			10,714,353
	Diluted shares outstanding		11,163,592			10,714,353
	Net loss per common share:
	Basic	$	(0.57	)	$	(0.46	)
	Diluted	$	(0.57	)	$	(0.46	)
Common stock not included in the computation of diluted income (loss) per share		Year Ended December 31,
		2014			2013
	Shares of common stock issuable under equity incentive plans outstanding		2,147,561			2,130,239
	Shares of common stock issuable upon conversion of warrants		500,000			-
	Common stock equivalent shares excluded from diluted net loss per share		2,647,561			2,130,239

3_Acquisition_Tables

3. Acquisition (Tables)	12 Months Ended
	Dec. 31, 2014
OSV [Member]
Allocation of the purchase price	Consideration (including estimated unpaid contingent consideration):
	Cash	$	195
	Common stock		134
	Contingent consideration		211
	Total consideration	$	540
	Recognized amounts of identifiable assets acquired and liabilities assumed:
	Identifiable intangible assets	$	353
	Commission liability		(10	)
	Total identifiable net assets		343
	Goodwill		197
	Total consideration	$	540
Identified intangible assets acquired and the respective estimated periods over which such assets will be amortized	Intangible Assets:	Amount			Weighted Average useful
					life (in years)
	Customer relationships	$	335			7
	Technology		18			3
	Total intangible assets	$	353
PBX Central [Member]
Allocation of the purchase price	Consideration (including estimated unpaid contingent consideration):
	Cash	$	300
	Common stock		107
	Contingent consideration		363
	Total consideration	$	770
	Recognized amounts of identifiable assets acquired and liabilities assumed:
	Property and equipment	$	7
	Identifiable intangible assets		688
	Total identifiable net assets		695
	Goodwill		75
	Total consideration	$	770
Identified intangible assets acquired and the respective estimated periods over which such assets will be amortized		Amount			Weighted Average useful
					life (In years)
	Technology	$	180			2
	Customer relationships		508			10
	Total	$	688

4_Trade_Receivables_net_Tables

4. Trade Receivables, net (Tables)	12 Months Ended
	Dec. 31, 2014
Trade Receivables Net Tables
Trade Receivables, net		December 31,
		2014			2013
	Trade receivables	$	433		$	688
	Conforming EPTAs		192			577
	Non-Conforming EPTAs:
	1 - 30 days		19			68
	31 - 60 days		28			30
	61 - 90 days		3			43
	Gross trade receivables		675			1,406
	Less: allowance for doubtful accounts		(68	)		(200	)
	Trade receivables, net	$	607		$	1,206
	Current trade receivables, net	$	543		$	1,090
	Long-term trade receivables, net		64			116
	Trade receivables, net	$	607		$	1,206

5_Equipment_Financing_Receivab1

5. Equipment Financing Receivables (Tables)	12 Months Ended
	Dec. 31, 2014
Equipment Financing Receivables Tables
Equipment Financing Receivables		December 31,
		2014			2013
	Gross financing receivables	$	1,610		$	1,369
	Less unearned income		(984	)		(877	)
	Financing receivables, net		626			492
	Less: Current portion of finance receivables, net		(171	)		(94	)
	Finance receivables due after one year	$	455		$	398

6_Property_and_Equipment_Table

6. Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2014
Property And Equipment Tables
Property and equipment		December 31,
		2014			2013
	Software	$	1,183		$	1,180
	Computers and office equipment		1,790			1,785
	Land		-			877
	Building		-			765
	Building improvements		-			758
	Leasehold improvements		8			8
	Furniture and fixtures		4			124
	Less accumulated depreciation and amortization		(2,917	)		(3,302	)
	Total property and equipment, net	$	68		$	2,195

7_Intangible_Assets_Tables

7. Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Net carrying amount of intangible		December 31,
		2014			2013
	Customer relationships	$	941		$	606
	Technical know-how		60			60
	Non-compete		60			60
	Developed technology		198			180
	Less accumulated amortization
	Customer relationships		(316	)		(163	)
	Technical know-how		(60	)		(60	)
	Non-compete		(60	)		(60	)
	Developed technology		(147	)		(52	)
	Total	$	676		$	571
Estimated future amortization expense	Year ending December 31,
	2015	$	209
	2016		131
	2017		97
	2018		72
	2019		53
	Thereafter		114
	Total	$	676

8_Goodwill_Tables

8. Goodwill (Tables)	12 Months Ended
	Dec. 31, 2014
Goodwill Tables
Goodwill for impairment on an annual basis		Acquisition Related Goodwill
	Balance at December 31, 2012	$	265
	Goodwill impairment - CastleWave		(265	)
	Additions - PBX Central		75
	Balance at December 31, 2013	$	75
	Additions - OSV		197
	Balance at December 31, 2014	$	272

9_Fair_Value_Measurements_Tabl

9. Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2014
Financial instruments		31-Dec-14								31-Dec-13
		Carrying Value				Estimated Fair Value				Carrying Value		Estimated Fair Value
	Assets:
	Trade receivables, net	$	607			$	607			$	1,206	$	1,190
	Equipment financing receivables		626				626				492		492
	Certificate of deposit		251				251				250		250
	Liabilities:
	Acquisition related contingent consideration	$	211			$	211			$	51	$	51
Assets for which fair value is disclosed						Fair value measurement at reporting date
	Description	As of December 31,				Level 1				Level 2		Level 3
		2014
	Assets:
	Certificate of deposit	$	251			$	-			$	251	$	-
	Liabilities:
	Acquisition related contingent consideration		211				-				-		211
	Description	As of December 31, 2013				Level 1				Level 2		Level 3
	Assets:
	Certificate of deposit	$	250			$	-			$	250	$	-
	Liabilities:
	Acquisition related contingent consideration		51				-				-		51
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation		Acquisition Related
		Contingent
		Consideration
	Balance at December 31, 2012	$	-
	Purchases, sales and settlements, net		87
	Cash payments		(23	)
	Fair value adjustment		(13	)
	Balance at December 31, 2013	$	51
	Change in fair value		3
	Cash payments		(54	)
	Additions		211
	Balance at December 31, 2014	$	211
Level 3 [Member]
Assets for which fair value is disclosed	Contingent consideration liability	Fair Value at December 31, 2014			Valuation technique	Unobservable inputs		Range
	Revenue - based payments	$	211		Discounted cash flow	Discount Rate			12.5	%
						Probability of milestone payment			90	%
						Projected year of payments			2014 - 2015
	Contingent consideration liability	Fair Value at December 31, 2013			Valuation technique	Unobservable inputs		Range
	Revenue - based payments	$	51		Discounted cash flow	Discount Rate			17.9	%
						Probability of milestone payment			90	%
						Projected year of payments			2014

10_Equity_Tables

10. Equity (Tables)	12 Months Ended
	Dec. 31, 2014
Equity [Abstract]
Shares of common stock reserved for future issuance	Common stock warrants	500,000
	Stock-based compensation plans:
	Outstanding option awards	2,147,561
	Available for future grants	3,555,434
		6,202,995
Fair value of the warrants was calculated using the Black-Scholes option-pricing model	Expected volatility	55	%
	Expected life (in years)	5
	Risk-free interest rate	1.76	%
	Expected dividend yield	0	%

11_StockBased_Compensation_Tab

11. Stock-Based Compensation (Tables)	12 Months Ended
	Dec. 31, 2014
Stock-Based Compensation Tables
Statement of operations effect of stock-based compensation			Year Ended December 31,
			2014			2013
	Share based compensation expense by financial statement line item:
	Cost of revenue		$	25		$	12
	Research and development			129			105
	Selling and marketing			64			76
	General and administrative			566			615
	Total cost related to share-based compensation expense		$	784		$	808
Fair value of stock options granted			Year Ended December 31,			Year Ended December 31,
			2014			2013
	Weighted-average fair value of options and warrants granted		$	1.01		$	1.13
	Expected volatility			55	%		59	%
	Expected life (in years)			4.6			4
	Risk-free interest rate			1.65	%		0.85	%
	Expected dividend yield			0	%		0	%
Stock option activity						Weighted-Average	Aggregate
				Weighted-Average		Remaining	Intrinsic Value
		Number of Shares		Exercise Price		Contract Life	(in thousands)
	Outstanding at January 1, 2013	1,738,860		$	4.61	8.4 years	$            52
	Granted	745,000			2.49
	Exercised	(67,832)			2.69
	Cancelled/forfeited	(285,789)			4.45
	Outstanding at December 31, 2013	2,130,239			3.96	8.0 years	482
	Granted	498,000			3.18
	Exercised	(28,418)			2.44
	Cancelled/forfeited	(452,260)			4.05
	Outstanding at December 31, 2014	2,147,561			3.78	6.9 years	-
	Shares vested and expected to vest	1,949,592			3.78	6.9 years	-
	Exercisable as of December 31, 2014	1,351,894			4.18	6.6 years	-
	Exercisable as of December 31, 2013	1,080,589			4.67	7.3 years	113

12_Income_Taxes_Tables

12. Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2014
Income Taxes Tables
Provision (benefit) for income taxes		Year Ended December 31, 2014			Year Ended December 31, 2013
	Current income tax expense/(benefit):
	Federal	$	-		$	(259	)
	State and local		77			59
	Foreign		-			(57	)
	Current income tax expense/(benefit)	$	77		$	(257	)
Reconciliation of federal statutory income tax rate to our effective income tax rate
		Year Ended December 31,			Year Ended December 31,
		2014			2013
	U.S. federal statutory income tax benefit	$	(2,142	)	$	(1,775	)
	Increase (decrease) in income tax benefit resulting from:
	State and local income tax benefit, net of federal effect		104			130
	Change in the valuation allowance for net deferred income tax assets		2,036			1,551
	Uncertain tax positions		-			(253	)
	Other, net		79			90
	Income tax expense/(benefit)	$	77		$	(257	)
Net deferred income tax assets and liabilities
		As of December 31, 2014						As of December 31, 2013
		Current			Non-current			Current			Non-current
	Deferred income tax assets:
	Accrued expenses	$	302		$	-		$	243		$	-
	Deferred revenue		230			-			293			-
	Net operating loss carry-forwards		-			7,132			-			5,182
	Foreign tax credits		-			892			-			892
	Stock-based compensation		-			2,895			-			2,568
	Property and equipment		-			118			-			223
	Other		-			708			-			706
	Subtotal		532			11,745			536			9,571
	Valuation allowance		(511	)		(11,364	)		(512	)		(9,327	)
	Total deferred income tax assets		21			381			24			244
	Deferred income tax liabilities:
	Property and equipment		-			-			-			-
	Prepaid expenses and other		(402	)		-			(268	)		-
	Total deferred income tax liabilities		(402	)		-			(268	)		-
	Net deferred income tax assets (liabilities)	$	(381	)	$	381		$	(244	)	$	244
Unrecognized tax benefits	Balance as of January 1, 2013	$	1,133
	Reductions due to lapsed statute of limitations		-242
	Balance as of December 31, 2013	$	891
	Reductions due to lapsed statute of limitations		-
	Balance as of December 31, 2014	$	891

13_Prepaid_Expenses_and_Other_

13. Prepaid Expenses and Other (Tables)	12 Months Ended
	Dec. 31, 2014
Prepaid Expenses And Other
Prepaid expenses		December 31,
		2014		2013
	Current prepaid rent	$	322	$	-
	Prepaid commissions		308		176
	Other		402		444
	Total current prepaids	$	1,032	$	620
	Long-term prepaid rent		376		-
	Total prepaid and other	$	1,408	$	620

14_Accrued_Expenses_Tables

14. Accrued Expenses (Tables)	12 Months Ended
	Dec. 31, 2014
AccruedExpensesTablesAbstract
Accrued expenses		December 31,
		2014		2013
	Accrued wages and benefits	$	345	$	473
	Accrued accounts payable		318		70
	Accrued legal costs		231		202
	Accrued sales taxes		209		105
	Other		228		245
	Total accrued expenses	$	1,331	$	1,095

15_Commitments_and_Contingenci1

15. Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Future aggregate minimum lease obligations under operating leases
	Years ending December 31,
	2015		119
	2016		92
	Total		$           211
Total rental expense		Years ending December 31,
		2015		2016
	Minimum rentals	$             119		$               92
	Less: Sublease rentals	(107)		(92)
	Total	$               12		$               -
Schedule of prepaid rent	Current prepaid rent		$	322,000
	Long-term prepaid rent			376,000
	Total prepaid rent, net		$	698,000

17_Segments_Tables

17. Segments (Tables)	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
Information on reportable segments and reconciliation to condensed consolidated net (loss) income		December 31,
		2014			2013
	Revenue:
	Hosted Telecommunications Services	$	4,297		$	2,370
	Web Services		3,297			7,958
	Consolidated revenue		7,594			10,328
	Loss from Operations:
	Hosted Telecommunications Services		(5,776	)		(5,432	)
	Web Services		(823	)		(313	)
	Total operating loss		(6,599	)		(5,745	)
	Other Income, net:
	Hosted Telecommunications Services		87			3
	Web Services		213			522
	Total other income		300			525
	Income/(Loss) before income tax provision
	Hosted Telecommunications Services		(5,689	)		(5,429	)
	Web Services		(610	)		209
	Loss before income tax provision	$	(6,299	)	$	(5,220	)

19_Quarterly_Financial_Informa1

19. Quarterly Financial Information (unaudited) (Tables)	12 Months Ended
	Dec. 31, 2014
Quarterly Financial Information Tables
Quarterly Financial Information			Year ended December 31, 2014
			For the three months ended
				March 31,				June 30,			September 30,			December 31,
				2014				2014			2014			2014
				(In thousands, except per share data)
	Revenue		$	2,072			$	1,808		$	1,725		$	1,989
	Operating expenses:
	Cost of revenue			930				884			790			978
	Selling and marketing			653				504			546			577
	General and administrative			1,750				1,548			1,549			1,880
	Research and development			414				435			394			361
	Goodwill impairment			-				-			-			-
	Total operating expenses			3,747				3,371			3,279			3,796
	Loss from operations			(1,675	)			(1,563	)		(1,554	)		(1,807	)
	Total other income			77				82			61			80
	Loss before income taxes			(1,598	)			(1,481	)		(1,493	)		(1,727	)
	Income tax benefit (provision)			(34	)			(13	)		(9	)		(21	)
	Net loss		$	(1,632	)		$	(1,494	)	$	(1,502	)	$	(1,748	)
	Basic net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.15	)
	Diluted net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.15	)
				Year ended December 31, 2013
				For the three months ended
				March 31,				June 30,			September 30,			December 31,
				2013				2013			2013			2013
				(In thousands, except per share data)
	Revenue		$	3,022			$	2,737		$	2,428		$	2,141
	Operating expenses:
	Cost of revenue			1,042				970			1,044			1,035
	Selling and marketing			908				717			712			718
	General and administrative (2)			1,438				1,852			1,745			1,935
	Research and development			481				414			396			401
	Goodwill impairment			-				-			265			-
	Total operating expenses			3,869				3,953			4,162			4,089
	Loss from operations			(847	)			(1,216	)		(1,734	)		(1,948	)
	Total other income			212				120			98			95
	Loss before income taxes			(635	)			(1,096	)		(1,636	)		(1,853	)
	Income tax benefit (provision)			237				26			(23	)		17
	Net loss		$	(398	)		$	(1,070	)	$	(1,659	)	$	(1,836	)
	Basic net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.17	)
	Diluted net loss per common share (1)		$	(0.15	)		$	(0.13	)	$	(0.13	)	$	(0.17	)
	———————
	(1)	Net income (loss) per common share is computed independently for each of the quarters presented. Therefore, the sums of quarterly net income (loss) per common share amounts do not necessarily equal the total for the twelve month periods presented.
	-2	During the first quarter of the year ended December 31, 2013, we entered into a settlement and released $606,000 of the lease abandonment accrual.
Valuation and Qualifying Accounts			Balance at										Balance at
			Beginning										End of
			of Year			Additions				Deductions			Year
						(in thousands)
	Year ended December 31, 2014
	Allowance for doubtful accounts receivable		$	200			$	-		$	(132	)	$	68
	Deferred income tax asset valuation allowance			9,839				2,039			-			11,878
	Year ended December 31, 2013
	Allowance for doubtful accounts receivable		$	1,522			$	-		$	(1,322	)	$	200
	Deferred income tax asset valuation allowance			8,288				1,551			-			9,839

1_Significant_Accounting_Polic3

1. Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2014
Computer software
Depreciable lives	3 years
Furniture and fixtures
Depreciable lives	4 years
Leasehold improvements | Minimum
Depreciable lives	2 years
Leasehold improvements | Maximum [Member]
Depreciable lives	5 years

1_Significant_Accounting_Polic4

1. Significant Accounting Policies (Details 1) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Significant Accounting Policies Details 1
Prepaid sales commissions	$424	$189
Accumulated amortization	-116	-13
Prepaid sales commissions, net	$308	$176

1_Significant_Accounting_Polic5

1. Significant Accounting Policies (Details Narrative) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Significant Accounting Policies Details Narrative
Restricted cash	$133	$487
Cash and cash equivalents in financial institutions in excess of federally insured limits	2,487
Restricted cash federally insured limits	133
Interest Income	150	501
Depreciation and amortization expense included in general and administrative expenses	415	1,022
Amortization of deferred commissions	103	13
Amortization expense from acquired assets included in general and administrative expenses	$248	$123

2_Net_Loss_Per_Common_Share_De

2. Net Loss Per Common Share (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Net Loss Per Common Share Details
Net loss (in thousands)	($1,748)	($1,502)	($1,494)	($1,632)	($1,836)	($1,659)	($1,070)	($398)	($6,376)	($4,963)
Weighted-average share reconciliation:
Weighted-average shares outstanding									11,163,592	10,714,353
Weighted-average basic shares outstanding									11,163,592	10,714,353
Diluted shares outstanding									11,163,592	10,714,353
Net loss per common share:
Basic	($0.15)	($0.13)	($0.13)	($0.15)	($0.17)	($0.13)	($0.13)	($0.15)	($0.57)	($0.46)
Diluted	($0.15)	($0.13)	($0.13)	($0.15)	($0.17)	($0.13)	($0.13)	($0.15)	($0.57)	($0.46)

2_Net_Loss_Per_Common_Share_De1

2. Net Loss Per Common Share (Details 1)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Net Loss Per Common Share Details 1
Shares of common stock issuable under equity incentive plans outstanding	2,147,561	2,130,239
Shares of common stock issuable upon conversion of warrants	500,000
Common stock equivalent shares excluded from diluted net loss per share	2,647,561	2,130,239

3_Acquisition_Details_1

3. Acquisition (Details 1) (OSV [Member], USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014
OSV [Member]
Consideration (including estimated unpaid contingent consideration):
Cash	$195
Common Stock	134
Contingent consideration	211
Total Consideration	540
Recognized amounts of identifiable assets acquired and liabilities assumed:
Identifiable intangible assets	353
Commission liability	-10
Total identifiable net assets	343
Goodwill	197
Total consideration	$540

3_Acquisition_Details_2

3. Acquisition (Details 2) (OSV [Member], USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014
Identified intangible assets acquired	$353
Customer Relationships [Member]
Identified intangible assets acquired	335
Weighted Average useful life (In years)	7 years
Technology [Member]
Identified intangible assets acquired	$18
Weighted Average useful life (In years)	3 years

3_Acquisition_Details_3

3. Acquisition (Details 3) (PBX Central [Member], USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014
PBX Central [Member]
Consideration (including estimated unpaid contingent consideration):
Cash	$300
Common Stock	107
Contingent consideration	363
Total Consideration	770
Recognized amounts of identifiable assets acquired and liabilities assumed:
Property and Equipment	7
Identifiable intangible assets	688
Total identifiable net assets	695
Goodwill	75
Total consideration	$770

3_Acquisition_Details_4

3. Acquisition (Details 4) (PBX Central [Member], USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014
Identified intangible assets acquired	$688
Technology [Member]
Identified intangible assets acquired	180
Weighted Average useful life (In years)	2 years
Customer Relationships [Member]
Identified intangible assets acquired	$508
Weighted Average useful life (In years)	10 years

4_Trade_Receivables_net_Detail

4. Trade Receivables, net (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Valuation and Qualifying Accounts Disclosure [Line Items]
Trade receivables	$433	$688
Conforming EPTAs	192	577
Gross trade receivables	675	1,406
Less allowance for doubtful accounts	-68	-200
Trade receivables, net	607	1,206
Current trade receivables, net	543	1,090
Long-term trade receivables, net	64	116
Trade receivables, net	607	1,206
Non-Conforming EPTAs [Member]
Valuation and Qualifying Accounts Disclosure [Line Items]
1 - 30 days	19	68
31 - 60 days	28	30
61 - 90 days	$3	$43

4_Trade_Receivables_net_Detail1

4. Trade Receivables, net (Details Narrative) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Trade Receivables Net Details Narrative
Write off	$158	$1,027

5_Equipment_Financing_Receivab2

5. Equipment Financing Receivables (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Equipment Financing Receivables Details
Gross financing receivables	$1,610	$1,369
Less unearned income	-984	-877
Financing receivables, net	626	492
Less: Current portion of finance receivables, net	-171	-94
Finance receivables due after one year	$455	$398

6_Property_and_Equipment_Detai

6. Property and Equipment (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Property And Equipment Details
Software	$1,183	$1,180
Computers and office equipment	1,790	1,785
Land	0	877
Building	0	765
Building Improvements	0	758
Leasehold improvements	8	8
Furniture and fixtures	4	124
Less accumulated depreciation and amortization	-2,917	-3,302
Total property and equipment, net	$68	$2,195

7_Intangible_Assets_Details

7. Intangible Assets (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Carrying amount of intangible, Net	$676	$571
Customer Relationships [Member]
Carrying amount of intangible, Gross	941	606
Less accumulated amortization	-316	-163
Technical Know How [Member]
Carrying amount of intangible, Gross	60	60
Less accumulated amortization	-60	-60
Non Compete [Member]
Carrying amount of intangible, Gross	60	60
Less accumulated amortization	-60	-60
Developed technology
Carrying amount of intangible, Gross	198	180
Less accumulated amortization	($147)	($52)

7_Intangible_Assets_Details_1

7. Intangible Assets (Details 1) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Goodwill and Intangible Assets Disclosure [Abstract]
2015	$209
2016	131
2017	97
2018	72
2019	53
Thereafter	114
Total	$676	$571

8_Goodwill_Details

8. Goodwill (Details) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Balance Beginning			$265
Balance Ending	272	75	265
OSV [Member]
Additions	197
PBX Central [Member]
Additions		75
Castle Wave [Member]
Goodwill impairment		($265)

9_Fair_Value_Measurements_Deta

9. Fair Value Measurements (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Assets:
Certificate of deposit	$251	$250
Liabilities:
Acquisition related contingent consideration	211	51	0
Carrying Value [Member]
Assets:
Trade receivables, net	607	1,206
Equipment financing receivables	626	492
Certificate of deposit	251	250
Liabilities:
Acquisition related contingent consideration	211	51
Estimated Fair Value [Member]
Assets:
Trade receivables, net	607	1,190
Equipment financing receivables	626	492
Certificate of deposit	251	250
Liabilities:
Acquisition related contingent consideration	$211	$51

9_Fair_Value_Measurements_Deta1

9. Fair Value Measurements (Details 1) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Assets:
Certificate of deposit	$251	$250
Liabilities:
Acquisition related contingent consideration	211	51	0
Level 1 [Member]
Assets:
Certificate of deposit	0	0
Liabilities:
Acquisition related contingent consideration	0	0
Level 2 [Member]
Assets:
Certificate of deposit	251	250
Liabilities:
Acquisition related contingent consideration	0	0
Level 3 [Member]
Assets:
Certificate of deposit	0	0
Liabilities:
Acquisition related contingent consideration	$211	$51

9_Fair_Value_Measurements_Deta2

9. Fair Value Measurements (Details 2) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Acquisition related contingent consideration	$211	$51	$0
Level 3 [Member]
Acquisition related contingent consideration	$211	$51

9_Fair_Value_Measurements_Deta3

9. Fair Value Measurements (Details 3) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Fair Value Measurements Details 3
Acquistion Related Contingent Consideration	$51	$0
Purchases, sales and settlements, net		87
Cash payments	-54	-23
Fair value adjustment		-13
Change in fair value	3
Additions	211
Acquistion Related Contingent Consideration	$211	$51

10_Equity_Details

10. Equity (Details)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Equity Details
Common stock warrants	500,000
Stock-based compensation plans:
Outstanding option awards	2,147,561	2,130,239	1,738,860
Available for future grants	3,555,434
Total	6,202,995

10_Equity_Details_1

10. Equity (Details 1) (Warrant [Member])	12 Months Ended
	Dec. 31, 2014
Warrant [Member]
Expected volatility	55.00%
Expected life (in years)	5 years
Risk-free interest rate	1.76%
Expected dividend yield	0.00%

11_StockBased_Compensation_Det

11. Stock-Based Compensation (Details) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Total cost related to share-based compensation expense	$784	$808
Cost of revenue [Member]
Total cost related to share-based compensation expense	25	12
Research and development [Member]
Total cost related to share-based compensation expense	129	105
Selling and marketing [Member]
Total cost related to share-based compensation expense	64	76
General and administrative [Member]
Total cost related to share-based compensation expense	$566	$615

11_StockBased_Compensation_Det1

11. Stock-Based Compensation (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stock-Based Compensation Details 1
Weighted-average fair value of options and warrants granted	$1.01	$1.13
Expected volatility	55.00%	59.00%
Expected life (in years)	4 years 7 months 6 days	4 years
Risk-free interest rate	1.65%	0.85%
Expected dividend yield	0.00%	0.00%

11_StockBased_Compensation_Det2

11. Stock-Based Compensation (Details 2) (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Number of Shares
Outstanding	2,130,239	1,738,860
Granted	498,000	745,000
Exercised	-28,418	-67,832
Cancelled/forfeited	-452,260	-285,789
Outstanding	2,147,561	2,130,239
Shares vested and expected to vest	1,949,592
Exercisable	1,351,894	1,080,589
Weighted-Average Exercise Price
Outstanding	$3.96	$4.61
Granted	$3.18	$2.49
Exercised	$2.44	$2.69
Cancelled/forfeited	$4.05	$4.45
Outstanding	$3.78	$3.96
Shares vested and expected to vest	$3.78
Exercisable	$4.18	$4.67
Weighted-Average Remaining Contract Life
Outstanding	8 years	8 years 4 months 24 days
Outstanding	6 years 10 months 24 days	8 years
Shares vested and expected to vest	6 years 10 months 24 days
Exercisable	6 years 7 months 6 days	7 years 3 months 18 days
Aggregate Intrinsic Value
Outstanding	$482	$52
Outstanding		482
Shares vested and expected to vest
Exercisable		$113

11_StockBased_Compensation_Det3

11. Stock-Based Compensation (Details Narrative) (USD $)	12 Months Ended
In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Stock-Based Compensation Details Narrative
Shares remaining in the plans available to grant	3,555,434
Intrinsic value of options exercised	$21	$133
Total future compensation expense related to non-vested options not yet recognized	$1,045
Total future compensation expense related to non-vested options not yet recognized, period	1 year 10 months 24 days

12_Income_Taxes_Details

12. Income Taxes (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Current income tax expense/(benefit):
Federal									$0	($259)
State and local									77	59
Foreign									0	-57
Current income tax expense/(benefit)	($21)	($9)	($13)	($34)	$17	($23)	$26	$237	$77	($257)

12_Income_Taxes_Details_1

12. Income Taxes (Details 1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Income Taxes
U.S. federal statutory income tax benefit	($2,142)	($1,775)
Increase (decrease) in income tax benefit resulting from:
State and local income tax benefit, net of federal effect	104	130
Change in the valuation allowance for net deferred income tax assets	2,036	1,551
Uncertain tax positions	0	-253
Other, net	79	90
Income tax expense/(benefit)	$77	($257)

12_Income_Taxes_Details_2

12. Income Taxes (Details 2) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Deferred income tax assets:
Total deferred income tax assets	$381	$244
Current [Member]
Deferred income tax assets:
Accrued expenses	302	243
Deferred revenue	230	293
Net operating loss carry-forwards	0	0
Foreign tax credits	0	0
Stock-based compensation	0	0
Property and equipment	0	0
Other	0	0
Subtotal	532	536
Valuation allowance	-511	-512
Total deferred income tax assets	21	24
Deferred income tax liabilities:
Property and equipment	0	0
Prepaid expenses and other	-402	-268
Total deferred income tax liabilities	-402	-268
Net deferred income tax assets (liabilities)	-381	-244
NonCurrent [Member]
Deferred income tax assets:
Accrued expenses	0	0
Deferred revenue	0	0
Net operating loss carry-forwards	7,132	5,182
Foreign tax credits	892	892
Stock-based compensation	2,895	2,568
Property and equipment	118	223
Other	708	706
Subtotal	11,745	9,571
Valuation allowance	-11,364	-9,327
Total deferred income tax assets	381	244
Deferred income tax liabilities:
Property and equipment	0	0
Prepaid expenses and other	0	0
Total deferred income tax liabilities	0	0
Net deferred income tax assets (liabilities)	$381	$244

12_Income_Taxes_Details_3

12. Income Taxes (Details 3) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Income Taxes
Beginning Balance	$891	$1,133
Reductions due to lapsed statute of limitations	0	-242
Ending Balance	$891	$891

12_Income_Taxes_Details_Narrat

12. Income Taxes (Details Narrative) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Effective tax rate	34.00%	34.00%
Valuation allowance for deferred tax assets	$11,878	$9,839
Net change in our valuation allowance	3,039	1,551
Research and development
Operating loss carryforwards	18,861
Operating loss carryforwards, exiration date	2019 through 2020
Foreign tax credit carry-forwards
Operating loss carryforwards	129
Operating loss carryforwards, exiration date	expire in 2017
U.S. federal income tax reporting
Operating loss carryforwards	$892
Operating loss carryforwards, exiration date	2020 through 2034

13_Prepaid_Expenses_and_Other_1

13. Prepaid Expenses and Other (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Prepaid Expenses And Other
Current prepaid rent	$322	$0
Prepaid commissions	308	176
Other	402	444
Total current prepaids	1,032	620
Long-term prepaid rent	376	0
Total prepaid and other	$1,408	$620

14_Accrued_Expenses_Details

14. Accrued Expenses (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
AccruedExpensesDetailsAbstract
Accrued wages and benefits	$345	$473
Accrued accounts payable	318	70
Accrued legal costs	231	202
Accrued sales taxes	209	105
Other	228	245
Total accrued expenses	$1,331	$1,095

15_Commitments_and_Contingenci2

15. Commitments and Contingencies (Details) (USD $)	Dec. 31, 2014
In Thousands, unless otherwise specified
Commitments And Contingencies Details
2015	$119
2016	92
Total	$211

15_Commitments_and_Contingenci3

15. Commitments and Contingencies (Details 1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Commitments And Contingencies Details 1
Minimum rentals	$119	$92
Less: Sublease rentals	-107	-92
Total	$12	$0

15_Commitments_and_Contingenci4

15. Commitments and Contingencies (Details 2) (USD $)	Dec. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
Commitments and Contingencies Disclosure [Abstract]
Current prepaid rent	$322	$0
Long-term prepaid rent	376	0
Total prepaid rent, net	$698

15_Commitments_and_Contingenci5

15. Commitments and Contingencies (Details Narrative) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Liabilities relating to legal proceedings	$231	$202
Amortization of prepaid rent	$268	$0

16_Employee_Benefit_Plan_Detai

16. Employee Benefit Plan (Details Narrative) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Employee Benefit Plan Details Narrative
Employer contributions to employee benefit plan	$146	$169

17_Segment_Details

17. Segment (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Segment Information
Revenue	$1,989	$1,725	$1,808	$2,072	$2,141	$2,428	$2,737	$3,022	$7,594	$10,328
Loss from Operations	-1,807	-1,554	-1,563	-1,675	-1,948	-1,734	-1,216	-847	-6,599	-5,745
Other Income, net									300	525
Income/(Loss) before income tax provision									-6,299	-5,220
Hosted Telecommunications Services [Member]
Segment Information
Revenue									4,297	2,370
Loss from Operations									-5,776	-5,432
Other Income, net									87	3
Income/(Loss) before income tax provision									-5,689	-5,429
Web Services [Member]
Segment Information
Revenue									3,297	7,958
Loss from Operations									-823	-313
Other Income, net									213	522
Income/(Loss) before income tax provision									($610)	$209

19_Quarterly_Financial_Informa2

19. Quarterly Financial Information (unaudited) (Details) (USD $)	3 Months Ended								12 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Details
Revenue	$1,989	$1,725	$1,808	$2,072	$2,141	$2,428	$2,737	$3,022	$7,594	$10,328
Cost of revenue	978	790	884	930	1,035	1,044	970	1,042	3,582	4,091
Selling and marketing	577	546	504	653	718	712	717	908	2,280	3,055
General and administrative	1,880	1,549	1,548	1,750	1,935	1,745	1,852	1,438	6,727	6,970
Research and development	361	394	435	414	401	396	414	481	1,604	1,692
Goodwill impairment	0	0	0	0	0	265	0	0	0	265
Total operating expenses	3,796	3,279	3,371	3,747	4,089	4,162	3,953	3,869	14,193	16,073
Loss from operations	-1,807	-1,554	-1,563	-1,675	-1,948	-1,734	-1,216	-847	-6,599	-5,745
Total other income	80	61	82	77	95	98	120	212	300	525
Loss before income taxes	-1,727	-1,493	-1,481	-1,598	-1,853	-1,636	-1,096	-635	-6,299	-5,220
Income tax benefit (provision)	-21	-9	-13	-34	17	-23	26	237	77	-257
Net loss	($1,748)	($1,502)	($1,494)	($1,632)	($1,836)	($1,659)	($1,070)	($398)	($6,376)	($4,963)
Basic net loss per common share	($0.15)	($0.13)	($0.13)	($0.15)	($0.17)	($0.13)	($0.13)	($0.15)	($0.57)	($0.46)
Diluted net loss per common share	($0.15)	($0.13)	($0.13)	($0.15)	($0.17)	($0.13)	($0.13)	($0.15)	($0.57)	($0.46)

20_Quarterly_Financial_Informa

20. Quarterly Financial Information (unaudited) (Details 1) (USD $)	12 Months Ended
In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Allowance for doubtful accounts receivable
Balance at Beginning of Year	$200	$1,522
Additions	0	0
Deductions	-132	-1,322
Balance at End of Year	68	200
Deferred income tax asset valuation allowance
Balance at Beginning of Year	9,839	8,288
Additions	2,039	1,551
Deductions	0	0
Balance at End of Year	$11,878	$9,839