**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        DC 20549**
 
  **FORM
        10-K**
 (Mark
          One)
 x
                ANNUAL
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934
 
 For
          the
          fiscal year ended  December
          31, 2005
 
 OR
 
 o
                TRANSITION
                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934
  For
        the
        transition period from __________ to __________
 
 Commission
        File Number 0-29359
 
 GOAMERICA,
        INC.
 
 (Exact
        Name of Registrant as Specified in Its Charter)
  Delaware
              
              22-3693371(State
                  or Other Jurisdiction
                of
                  Incorporation or Organization)
              
              (I.R.S.
                  Employer Identification No.)
 
 433
                  Hackensack Avenue, Hackensack, New Jersey
              07601(Address
                  of Principal Executive Offices)
              (Zip
                  Code)
  Registrant's
        telephone number, including area code (201)
        996-1717
 
  Securities
        registered pursuant to Section 12(b) of the Act:
  Title
                  of each class
              
              Name
                  of Each Exchange on Which RegisteredNone
  Securities
        registered pursuant to Section 12(g) of the Act:
  Common
        Stock, $0.01 par value
 
 (Title
        of
        Class)
 Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act.
  Yes:
              
              
              No:
              X
 
  Indicate
        by check mark if the registrant is not required to file reports pursuant
        to
        Section 13 or Section 15(d) of the Act.
  Yes:
              
              
              No:
              X
 
  Indicate
        by check mark whether the registrant: (1) has filed all reports required
        to be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to such filing requirements
        for
        the past 90 days.
  Yes:
              X
              
              No:
 
 Indicate
        by check mark if disclosure of delinquent filers pursuant to Item 405 of
        Regulation S-K is not contained herein, and will not be contained, to the
        best
        of registrant's knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-K or any amendment
        to this
        Form 10-K. |X|
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
        (Check one):
  Large
                  Accelerated Filer
              
              Accelerated
                  Filer
              
              Non-accelerated
                  filer
              X
  Indicate
          by check mark whether the registrant is a shell company (as defined in
          Rule
          12b-2 of the Exchange Act).
  Yes:
                
                
                No:
                X
  The
        aggregate market value of the voting common equity of the registrant held
        by
        non-affiliates (for this purpose, persons and entities other than executive
        officers, directors, and 5% or more shareholders) of the registrant, as of
        the
        last business day of the registrant's most recently completed second fiscal
        quarter (June 30, 2005), was $12,590,227.
 
 Indicate
        the number of shares outstanding of each of the registrant's classes of common
        stock as of March 24, 2006:
  Class
              Number
                  of SharesCommon
                  Stock, $0.01 par value
              2,338,451
 
 The
        following documents are incorporated by reference into the Annual Report
        on Form
        10-K: Portions of the registrant's definitive Proxy Statement for its 2006
        Annual Meeting of Stockholders are incorporated by reference into Part III
        of
        this Report.
 
  **TABLE
        OF CONTENTS**
  Item
              
              PagePART
                  I
              1.
              Business
                  of the Company
              31A.
              Risk
                  Factors
              131B.
              Unresolved
                  Staff Comments
              262.
              Properties
              263.
              Legal
                  Proceedings
              264.
              Submission
                  of Matters to a Vote of Security Holders
              274A.
              Executive
                  Officers of the Registrant
              27PART
                  II
              5.
              Market
                  for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
                  Purchases of Equity Securities
              296.
              Selected
                  Consolidated Financial Data
              307.
              Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              327A.
              Quantitative
                  and Qualitative Disclosures About Market Risk
              478.
              Financial
                  Statements and Supplementary Data
              479.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              479A.
              Controls
                  and Procedures
              479B.
              Other
                  Information
              47PART
                  III
              10.
              Directors
                  of the Registrant
              4811.
              Executive
                  Compensation
              4812.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              4813.
              Certain
                  Relationships and Related Transactions
              4814.
              Principal
                  Accountant Fees and Services
              49PART
                  IV
              15.
              Exhibits
                  and Financial Statement Schedules
              49SIGNATURES
              50EXHIBIT
                  INDEX
              51INDEX
                  TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
                  SCHEDULE
              F-1
  
  **INTRODUCTORY
        NOTE**
  Each
        reference in this Annual Report to "GoAmerica", the "Company" or "We", or
        any
        variation thereof, is a reference to GoAmerica, Inc. and its subsidiaries,
        unless the context requires otherwise.
  Many
        of
        GoAmerica’s product/service names referred to herein are trademarks, service
        marks or tradenames of GoAmerica. This Annual Report also includes references
        to
        trademarks and tradenames of other companies. The GoAmerica and Wynd
        Communications names and logos and the names of proprietary products and
        services offered by GoAmerica and Wynd Communications are trademarks, registered
        trademarks, service marks or registered service marks of GoAmerica. ** “i711”,
        “i711.com”, and “Clear Mobile” are trademarks, and “Relay and Beyond” is a
        service mark, of GoAmerica.
   **FORWARD-LOOKING
        STATEMENTS**
  *The
        statements contained in this Annual Report on Form 10-K that are not historical
        facts are forward-looking statements (within the meaning of Section 21E of
        the
        Securities Exchange Act of 1934, as amended) that involve risks and
        uncertainties. Such forward-looking statements may be identified by the use
        of
        forward-looking terminology such as "may", "will", "expect", "estimate",
        "anticipate", "continue", or similar terms, variations of such terms or the
        negative of those terms. There are many factors that may cause actual results
        to
        differ materially from those contemplated by such forward-looking statements.
        In
        addition to the factors disclosed by us under the caption “RISK FACTORS” and
        elsewhere in this document, the following factors concerning GoAmerica, among
        others, could cause our actual results to differ materially and adversely
        from
        our forward-looking statements: (i) our limited operating history; (ii) our
        ability to successfully manage our relationship with EarthLink; (iii) our
        dependence on EarthLink to provide billing, customer and technical support
        to
        certain of our subscribers; (iv) our ability to respond to the rapid
        technological change of the wireless data industry and offer new services;
        (v)
        our dependence on wireless carrier networks; (vi) our ability to respond
        to
        increased competition in the wireless data industry; (vii) our ability to
        integrate acquired businesses and technologies; (viii) our ability to generate
        revenue growth; (ix) our ability to increase or maintain gross margins,
        profitability, liquidity and capital resources; (x) difficulties inherent
        in
        predicting the outcome of regulatory processes; and (xi) our limited experience
        in offering prepaid calling cards. Such risks and others are more fully
        described in the Risk Factors set forth in Item 1A of this Annual Report.
        Our
        actual results could differ materially from the results expressed in, or
        implied
        by, such forward-looking statements.*
  2
  **PART
        I**
  **Item
            1.** **Business
            of the Company.**
  **General**
  GoAmerica â is a
        communications service provider, offering solutions primarily for consumers
        who
        are deaf, hard of hearing and/or speech-impaired. Our revenue is derived
        from
        telecommunications relay services, wireless subscription services, prepaid
        telecommunications services and from equipment and commissions associated
        with
        the sale of wireless handheld devices.
  Our
        i711.comTM telecommunications
        relay service was launched in March 2005 and enables people who are deaf
        or hard
        of hearing to call and “converse” with hearing parties by using a computer,
        wireless handheld device or similar unit, through an operator that interprets
        text to voice and vice versa. Throughout 2005, we provided a wireless version
        of
        relay services under a license to Sprint-Nextel, which was marketed under
        a
        Sprint brand.
  Our
        wireless subscription services consist of WyndTell Ò and
        WyndPowerTM, which assist our deaf or hard of hearing customers in communicating
        from most major metropolitan areas in the continental United States and parts
        of
        Canada. WyndTell and WyndPower allow customers to send and receive TTY/TDD
        (text
        telephone or teletypewriter) messages, faxes, and text-to-speech messages,
        send
        and receive email messages to and from any email service, provide for delivery
        and acknowledgements of sent messages that are read, and access the Internet
        using such wireless computing devices as Research in Motion, or RIM, wireless
        handheld devices, certain Motorola paging devices and the T-Mobile Sidekick,
        Fido hiptop, and SunCom hiptop devices running on Danger Inc.'s hiptop platform.
        GoAmerica continues to offer wireless data products and services to the consumer
        and enterprise markets as well as support customers who use our proprietary
        software technology called Go.Web Ô .
        Go.Web
        is designed for use mainly by enterprise customers to enable secure wireless
        access to corporate data and the Internet primarily from RIM Blackberry wireless
        handhelds.
  Our
        prepaid services, which we launched in September 2004, include domestic and
        international calling cards, sold primarily in the northeast portion of the
        United States under the GA PrepaidTM brand.
  We
        sell
        wireless devices directly to customers and indirectly through sub-dealers.
        We
        have dealer agreements with T-Mobile and Sprint-Nextel, whereby we sell devices
        and earn a commission, also called a bounty, upon activation of the device
        with
        an associated service rate plan.
  3
  Our
        principal office is located at 433 Hackensack Avenue, Hackensack, New Jersey
        07601, our voice telephone number is (201) 996-1717, and our TTY number is
        (201)
        527-1520. Our web site is located at www.goamerica.com. We have not incorporated
        by reference into this Form 10-K any of the information on our Web site,
        and you
        should not consider it to be a part of this document. Our web site address
        is
        included in this document as an inactive textual reference only.
  **Corporate
        History**
  GoAmerica
        Communications Corp. was incorporated in Delaware in 1996. In December 1999,
        GoAmerica, Inc. was incorporated in Delaware and each of the security holders
        of
        GoAmerica Communications Corp. exchanged all of their outstanding securities
        for
        newly issued securities of GoAmerica, Inc., with GoAmerica Communications
        Corp.
        becoming a wholly owned subsidiary of GoAmerica, Inc. GoAmerica, Inc.
        consummated the initial public offering of its common stock in April 2000
        and
        acquired Wynd Communications Corporation on June 28, 2000.
  On
        September 25, 2002, we revised our Go.Web business model by entering into
        a
        series of agreements with EarthLink, Inc. (“Earthlink”), pursuant to which,
        among other things, EarthLink purchased certain of our subscribers,
        EarthLink provides billing, collections and customer service to our Go.Web
        customers, and EarthLink and GoAmerica collaborated on marketing each other’s
        services and developing new applications for and extensions of existing
        technologies and services. The initial term of this relationship with EarthLink
        was two years and it has continued to operate on substantially similar terms;
        however, we cannot predict at this time whether this arrangement will be
        extended, terminated or restructured as the importance of this relationship
        to
        the Company decreased continually throughout 2005 as a result of our emphasis
        on
        the deaf and hard of hearing markets.
  In
        December 2003, we announced plans for a strategic re-focusing premised on
        a
        financing that we completed in March 2004, which centered on growth of our
        core
        Wynd Communications wireless services business, development and marketing
        of new
        communications services, included branded Internet protocol relay services,
        or
        IP relay services, and video relay services, and providing superior customer
        support services.
  **Our
        Business**
  GoAmerica’s
        strategy is to focus its resources on providing a variety of accessible
        communications services to people who are deaf, hard of hearing and/or speech
        impaired. According to the American Speech and Hearing Association, more
        than 28
        million Americans currently experience some level of significant hearing
        loss.
  4
  *Relay
        Services*
  In
        2005,
        we offered two forms of IP relay service: a wireless service marketed in
        conjunction with Sprint Nextel, and, as of March 24, 2005, our i711.comTM branded
        Internet service, which uses Nordia, Inc.’s technology platform and relay
        operators (also referred to as Communication Assistants or “CA’s”) to facilitate
        calls.
  As
        of
        February 1, 2006, we terminated our license to Sprint Nextel and have launched
        our own i711.com branded wireless relay service.
  Our
        i711.com wireless relay service permits deaf consumers to contact a
        Telecommunications Relay Service, or “TRS”, operator to place a “live” telephone
        call to a hearing party by using certain wireless handheld devices. TRS,
        generally, enables standard voice telephone users to talk to people who have
        difficulty hearing or speaking on the telephone by having a Communications
        Assistant interpret for both parties via text-to-voice
        interpretation.
  Substantially
        all TRS, including our IP relay services, are free to the consumers who use
        them
        as such services are subsidized by a portion of the Universal Services Fund
        assessment collected by telecommunications carriers from most of their
        customers. Like the other relay service providers, we receive payment indirectly
        from the federal government based on relay minutes used that are initiated
        on
        our particular service. The Federal Communications Commission requires all
        telephone common carriers to pay certain amounts to a central reimbursement
        fund, establishes a per-minute reimbursement rate and authorizes the National
        Exchange Carriers Association to administer the payments to service providers
        like us from the reimbursement fund. We do not know if the current and future
        per-minute reimbursement rates will increase, decrease or remain substantially
        the same as current levels. (See “Business - Government
        Regulation”.)
  For
        a
        person that is deaf or severely hard of hearing, the TTY or TDD, a text-based
        communications instrument that operates in North America using an outdated
        Baudot 45.5 protocol, had historically been the centerpiece of
        telecommunications accessibility, usually requiring a wireline connection.
        The
        size and weight of most TTY devices and the slow transmission speed of the
        Baudot protocol makes communicating “on-the-go” a difficult task for a deaf
        individual. Over the years, advances in regulatory policy and technology
        have
        vastly improved the level of communications accessibility available to deaf
        consumers nationwide. (See “Business - Government Regulation”.)
  5
  Although
        some people who are deaf or hard of hearing are still able to use voice-based
        communications services, TRS is becoming increasingly a primary means for
        those
        within this segment of the population who are profoundly deaf or speech impaired
        to communicate with businesses, health providers and hearing persons. The
        Internet Relay and Video Relay sectors of TRS are growing steadily due to
        broadband technology developments and the prevalence of the Internet. Internet
        Relay is available to anyone who has access to the Internet via a computer,
        wireless handheld device, Web-capable telephone or any other Internet
        Protocol-based device. Unlike traditional TRS, where a TTY user contacts
        a TRS
        center via telephone lines and the CA at the TRS center calls the receiving
        party via voice telephone, the first leg of an Internet Relay call goes from
        the
        caller’s computer or other Web-capable device, to the TRS relay center via the
        Internet. With the development of multiple Internet Relay services, deaf
        consumers now can choose their own relay provider rather than being required
        to
        use the provider for the State in which they live. We developed our i711.com
        web
        portal and service with distinctive calling features and a community orientation
        in order to be perceived as user friendly, familiar and a preferred Internet
        Relay service.
  Video
        Relay services, or “VRS”,
        enable
        individuals who use American Sign Language to use video equipment to make
        calls
        by communicating with a CA, who interprets the initial message into either
        speech or text and signs back the hearing party’s response. We do not presently
        offer a Video Relay service; however, we believe this is an underserved market
        with great growth potential for us and we are exploring various means of
        entry.
        On July 6, 2005, we entered into a merger agreement with Hands On Video Relay
        Services, Inc., a privately owned VRS provider, and its affiliates; however,
        the
        merger agreement was terminated as of March 1, 2006. (See “Business -
        Termination of Hands On Merger Agreement”.)
  *Wireless
        Subscription Services*
  Our
        wireless subscription services include those designed for and marketed to
        the
        deaf and hard of hearing market through Wynd Communications, and our Go.Web
        services, which are used primarily by business customers. At December 31,
        2005,
        GoAmerica had approximately 22,718 subscribers from which we receive, directly
        or indirectly, monthly subscription fees and, to a lesser degree, usage fees.
        The subscription and value added services currently available to our deaf
        and
        hard of hearing customers are WyndTell and WyndPower, which enable deaf,
        hard of
        hearing and/or speech-impaired users to communicate with co-workers, friends,
        family members, and AAA Emergency Roadside service, by means of wireless
        devices, using communications options such as email, fax, paging,
        text-to-speech, TTY messaging, and operator assisted services as well as
        access
        to the Internet.
  6
  Throughout
        2005, we continued to support wireless data technology, applications and
        software that address the productivity and communications needs of enterprise
        customers and consumers and are based on our proprietary software technology
        called Go.Web. By utilizing Go.Web, corporations can improve the productivity
        of
        employees by enabling secure wireless access to corporate data on many wireless
        computing devices and over many wireless data networks. Our Go.Web technology
        can be hosted and supported in a secure network operations center maintained
        by
        GoAmerica or its third party outsourcing provider. As our business emphasis
        and
        product development efforts are focused on servicing the deaf and hard of
        hearing markets, we have not continued to invest in Go.Web. The financial
        contribution of Go.Web to the Company has been declining and we do not foresee
        devoting significant resources to this business during 2006.
  *Prepaid
        Telecommunications Services*
  We
        offer
        our prepaid services through our GA PrepaidTM division,
        which we launched in September 2004. Our GA PrepaidTM telephone calling cards are
        marketed to U.S. consumers, for whom prepaid calling cards are a primary
        means
        of domestic and international telecommunications, under a variety of individual
        card brand names, including Cafe ¢ Con
        LecheTM, Caribbean ExpressTM and
        Caribbean QueenTM ,
        CanelaTM ,
        CharittoTM ,
        El
        GordoTM ,
        GA
        WorldwideTM ,
        Mi
        SuenoTM ,
        and Ta
        MejórTM .
        Cards
        are sold in various denominations through non-exclusive distributors, the
        majority of which are currently located in the northeastern U.S. Revenues
        derived from sales of our prepaid calling cards are deferred upon sale of
        the
        cards and recognized upon the earlier of the card being fully utilized or
        its
        expiration, which is 90 days from the date of first usage.
  We
        have
        established our own telecommunications
        switching platform, using a combination of dedicated lines and
        Voice-over-Internet Protocol (VOIP) technology as the underlying network
        architecture. Our switching platform connects to multiple tier-1 and tier-2
        carriers that terminate traffic for us in over 250 countries and
        territories.
  *Wireless
        Devices and Activations*
  Through
        dealer arrangements with T-Mobile and Sprint-Nextel, we sell wireless
        communications devices and earn commissions through the direct and indirect
        acquisition of subscribers on behalf of these network providers.
  **Sales
        and Marketing**
  *Sales*
  We
        currently sell our services and solutions through both direct and indirect
        channels of distribution. As of March 1, 2006, we had 4 employees working
        in a
        sales capacity.
  7
  *Direct
        Distribution.* Direct
        distribution methods consist of those channels in which our personnel actively
        assist the customers with placing orders, currently comprised of our sales
        professionals and our online shopping portal designed for people who are
        deaf or
        hard of hearing. Our telesales representatives respond to queries generated
        as a
        result of Web site visits and our marketing efforts, which usually contain
        our
        toll-free sales telephone and TTY numbers.
  *Indirect
        Distribution.* Indirect
        distribution methods consist of those channels where our distribution alliance
        partners take the order directly from the customers or refer customers to
        one of
        our direct sales representatives. With indirect distribution, we capture
        new
        business through dealers and value added resellers.
  Dealers
        offer our products and services to their customers and are paid a commission
        for
        each sale. A dealer’s commission may consist of a one-time bounty only or may
        include a small percentage of revenues generated by their customers. Dealers
        are
        not responsible for billing or supporting the customer.
  *Marketing*
  We
        generally deploy a marketing mix consisting of direct mail, Internet direct
        response, print ads in periodicals aimed at deaf and hard of hearing audiences,
        and tradeshow sponsorship and participation. As of March 1, 2006, we had
        3
        employees working in a marketing capacity.
  **Technology
        and Operations**
  *Service
        Infrastructure*
  *Data
        Center* .
        We use
        a publicly traded, third-party information technology firm to host many of
        our
        service applications. Our outsourcing strategy provides our customers with
        the
        highest levels of reliability while lowering our overall cost structure.
        We
        believe our provider’s facilities are capable of meeting the capacity demands
        and security standards for services we have developed or are developing for
        our
        customers. Technical personnel monitor network traffic, service quality,
        and
        security continually.
  *Wireless
        Networks* .
        Through
        our relationships with leading wireless services providers, our customers
        are
        able to use our wireless solutions in most major metropolitan areas in the
        continental U.S. and parts of Canada. We are a dealer for a variety of wireless
        network providers, and, in other cases, we provide wireless services directly
        to
        our customers through reseller agreements with wireless network operators
        such
        as Velocita (formerly Cingular Interactive; acquired by Sprint
        Nextel on February 21, 2006) and T-Mobile.
  8
  *Software
        Technology*
  For our
        text based relay services business, i711.com, we have developed
        a standard-based, but proprietary, services platform that enables our
        customers to place text relay calls using different access methods.
        The i711.com relay services platform allows access today from web browsers,
        AOL's AIM instant messaging clients and wireless devices. The architecture
        of
        our i711 relay services platform allows us to add new access methods and
        value
        added services to the platform. The platform also allows for the addition
        of
        wholly new services to be added in the future. Our i711 relay services
        platform offers deaf or hard of hearing users a secure, fast, reliable and
        user
        friendly relay platform through our use of Secure Socket Layer, or “SSL”,
        efficient coding practices, system redundancy and user centric design
        principles.
  For
        our
        wireless subscription business, we deploy a combination of licensed technology
        and custom built software. This technology gives our customers access to
        wireless messaging and information services specifically geared toward the
        needs
        of the deaf and hard of hearing users. We have developed and run gateway
        technology to connect wireless devices to a variety of traditional TTY devices
        as well as our proprietary TTY-based applications. Currently, our Wynd software
        supports the RIM-based family of 95X and 85X devices, certain Motorola paging
        devices, and the T-Mobile Sidekick, Fido hiptop and SunCom hiptop devices
        running on Danger Inc.’s hiptop platform.
  For
        our
        Go.Web business, we use our proprietary wireless services platform that enables
        our customers to securely access most types of Web-based data from many leading
        wireless devices. The Go.Web platform also allows qualified developers to
        introduce standard Web-based applications for many wireless devices and
        networks. As a result of our historical Go.Web development efforts, we have
        acquired substantial wireless and Web formatting expertise, which enables
        us to
        develop or adapt solutions as new wireless devices are introduced. In addition,
        the Go.Web compression technology and enhanced wireless transport protocol
        included in our software provide bandwidth efficiency and maximize data
        transmission speeds. We also have employed industry standard SSL and use
        Certicom's cryptography within the Go.Web infrastructure.
  *Licensed
        Software Technology*
  The
        Velocita Interactive Paging Service, or “IPS”, is based on server software that
        we have licensed. We are one of a limited number of companies that have deployed
        an IPS gateway. This service provides two-way messaging on devices such as
        the
        RIM interactive devices.
  *Customer
        Service, Billing and Fulfillment*
  We
        provide tier-1 customer support for users of our i711TM branded relay
        services offerings, with Nordia, Inc., our relay infrastructure provider,
        assisting as needed.
  We
        provide corporate or individual customer billing for all customers of our
        Wynd-related subscription services. For Go.Web, EarthLink provides the majority
        of customer support and billing under a revenue sharing arrangement.
  9
  For
        product fulfillment, we maintain an inventory of mobile devices which we
        buy
        from third-party manufacturers and resellers.
  **Termination
        of Hands On Merger Agreement**
  On
        July
        6, 2005, we entered into a merger agreement with Hands On Video Relay Services,
        Inc., Hands On Sign Language Services, Inc. and their principal shareholders
        (collectively referred to as “Hands On”) pursuant to which the Hands On
        companies were to merge with subsidiaries of GoAmerica in exchange for the
        Hands
        On shareholders receiving an amount of shares of GoAmerica common stock equal
        to
        the number of shares of GoAmerica common stock outstanding on the date the
        proposed merger closed, reduced in accordance with purchase price adjustments
        specified in the merger agreement. Hands On is a provider of VRS and sign
        language interpreting services to people who are deaf or hard of hearing.
        We had
        previously entered into a short term loan agreement, dated May 2, 2005, with
        Hands On pursuant to which we agreed to loan Hands On up to $1 million for
        capital expenditures consistent with growth plans that we intended to execute
        with Hands On upon merging. On October 28, 2005, the Hands On parties and
        GoAmerica executed a waiver and supplemental agreement, amending the merger
        agreement, which permitted Hands On to attempt to raise funds on its own
        for a
        limited period in exchange for additional reductions in the merger consideration
        to be received by Hands On shareholders in the event certain liabilities
        remained on Hands On’s balance sheet at the time of the merger. We filed a
        preliminary Registration Statement on Form S-4 on December 30, 2005 and filed
        the final amendment thereto on January 18, 2005. Each of GoAmerica and the
        Hands On companies established special stockholder meeting dates in February
        2006 at which the proposed merger was to be voted upon by each company’s
        stockholders of record as of January 13, 2006, to whom were mailed a joint
        proxy
        statement/prospectus and related materials. On February 22, 2006, the
        shareholders of each of the Hands On companies each approved the merger
        with us. Our special meeting of stockholders, originally scheduled for February
        27, 2006, was adjourned to March 13, 2006 in order to allow us additional
        time
        to achieve a quorum for our special meeting, which we did achieve on March
        6,
        2006. On March 1, 2006, Hands On sent us a letter purporting to terminate
        the
        merger agreement. Subsequent discussions were held among representatives
        of
        GoAmerica and Hands On, however there appeared to be no basis to continue
        to
        pursue our merger with Hands On. On March 7, 2006, we canceled our special
        stockholder meeting at which our stockholders were expected to approve the
        issuance of our common stock in the proposed merger with Hands On.
 
 **Competition**
  The
        relay
        services market consists of well-funded competitors such as AT&T,
        MCI/Verizon, Sprint Nextel, Hamilton Telecommunications, and Sorenson
        Communications ("Sorenson"). Each of these companies offers text relay services
        similar to ours and they may deploy similar enhancements and marketing tactics
        to attract the attention of prospective users. Each of the providers referred
        to
        above also offer VRS in addition to Hands On Video Relay Services, Inc. (See
        “Business-Termination of Hands On Merger Agreement”.) Sorenson currently is the
        largest provider VRS services used in the U.S., due in part to its ability
        to
        restrict users from accessing other VRS provider services. On February 20,
        2006,
        Sorenson announced plans to allow the users of its videophones to call not
        only
        Sorenson VRS interpreters but also the interpreters of other VRS providers.
        By
        no later than July 1, 2006, all users of the Sorenson videophone will be
        able to
        call a hearing person using sign language through the interpreters of any
        other
        VRS provider. We expect the removal of this calling restriction will cause
        many
        users currently using Sorenson VRS to exercise their option to use other
        VRS
        providers.
  10
  The
        market for our wireless services is becoming increasingly competitive. The
        widespread adoption of industry standards in the wireless data communications
        market may make it easier for new market entrants and existing competitors
        to
        introduce services that compete against ours. Our competitors may use the
        same
        products and services in competition with us. With time and capital, it would
        be
        possible for competitors to replicate our services. We expect that we will
        compete primarily on the basis of the functionality, breadth, quality and
        price
        of our services.
  Many
        of
        our existing and potential competitors have substantially greater financial,
        technical, marketing and distribution resources than we do, however, few
        of such
        competitors focus on deaf or hard of hearing customers to the same degree
        we do.
        Despite any lack of a similar focus on the part of our competitors, many
        of
        these companies may have greater name recognition and may be able to adopt
        more
        aggressive approaches to the market than we can. Competitive pressures may
        have
        a material adverse effect on our business and reduce our market
        share.
  **Research
        and Development**
  Most
        of
        our product and service offerings are developed internally. We also purchase
        and
        license technology. We continue to enhance the features and performance of
        certain existing products and services. In addition, we are continuing to
        develop new products that are complementary to our current suite of
        products.
  Our
        ability to meet our customers’ expectations depends on a number of factors,
        including our ability to identify and respond to emerging technological trends
        in our target markets, develop and maintain competitive products, enhance
        our
        existing products by adding features and functionality that differentiate
        them
        from those of our competitors and bring products to market on a timely basis
        and
        at competitive prices. Consequently, we have made, and we intend to continue
        to
        make, investments in research and development, subject to our capital
        constraints.
  **Intellectual
        Property Rights**
  We
        have
        not yet obtained patents on our technology that would preclude or inhibit
        competitors from using our technology. In February 2001, we filed a patent
        application on certain aspects of our Go.Web technology. The application
        is
        presently pending in the United States Patent and Trademark Office and has
        been
        filed internationally. Certain aspects of our various technologies rely on
        perpetual, royalty-free, worldwide licenses under third party patents relating
        to wireless products and services. We rely on a combination of patent,
        copyright, trademark, service mark, trade secret laws, unfair competition
        law
        and contractual restrictions to establish and protect certain proprietary
        rights
        in our technology and intellectual property. We have received or applied
        for
        registration of certain of our GoAmerica and Wynd names and marks in the
        United
        States Patent and Trademark Office. The steps taken by us to protect our
        intellectual property may not prove sufficient to prevent misappropriation
        of
        our technology or to deter independent third party development of similar
        technologies. In addition, the laws of certain foreign countries may not
        protect
        our technologies or intellectual property rights to the same extent as do
        the
        laws of the United States. We also rely on certain technologies that we license
        from third parties. These third party technology licenses may not continue
        to be
        available to us on commercially attractive terms. The loss of the ability
        to use
        such technology could require us to obtain the rights to use substitute
        technology, which could be more expensive or offer lower quality or performance,
        and therefore have a material adverse effect on our business, financial
        condition or results of operations. Third parties could claim infringement
        by us
        with respect to current or future technology. We expect that we and other
        participants in our markets will be increasingly subject to infringement
        claims
        as the number of services and competitors in our industry segment grows.
        Any
        such claim, whether meritorious or not, could be time consuming, result in
        costly litigation, cause service or installation interruptions or require
        us to
        enter into royalty or licensing agreements. Such royalty or licensing agreements
        might not be available on terms acceptable to us or at all. As a result,
        any
        such claim could have a material adverse effect upon our business, financial
        condition or results of operations.
 11
 **Government
        Regulation**
  The
        enactment of the Americans with Disabilities Act of 1990 mandated that every
        State implement a system for Telecommunications Relay Services whereby a
        deaf
        consumer, using a TTY connected to the telephone network, could communicate
        with
        a hearing person through the use of a relay operator. The Federal Communications
        Commission (“FCC”) has oversight responsibility for Telecommunications Relay
        Services in the U.S. and maintains guidelines that all States must follow.
        These
        services, beginning statewide in California in 1987 and nationally available
        since 1992, empowered deaf consumers to expand their use of the TTY in telephone
        conversations with hearing parties as well. At the national level, interstate
        relay services are funded by FCC-mandated common carrier contributions to
        a
        reimbursement fund that is administered by the National Exchange Carrier’s
        Association. At the State level, intrastate funds for relay reimbursement
        can
        come from rate payer surcharges, tariff charges to the local exchange carrier
        or
        taxes as administered by the State.
  We
        are
        not currently subject to direct federal, State or local government regulation,
        other than regulations that apply to businesses generally. The network carriers
        and third party providers we contract with to provide services are subject
        to regulation by the FCC and possibly one or more States. Changes in FCC
        regulations could affect the availability of our services and the network
        carriers’ and
        third party providers’ willingness
        or
        ability to sell to us. We could also be adversely affected by developments
        in
        regulations that govern or may in the future govern the Internet, the allocation
        of radio frequencies or the placement of cellular towers. Also, changes in
        these
        regulations could create uncertainty in the marketplace that could reduce
        demand
        for our services or increase the cost of doing business as a result of costs
        of
        litigation or increased service delivery cost or could in some other manner
        have
        a material adverse effect on our business, financial condition or results
        of
        operations.
  12
  We
        currently do not collect sales or other taxes with respect to the sale of
        services or products in states and countries where we believe we are not
        required to do so. We do collect sales and other taxes in the State in which
        we
        have an office and are required by law to do so. One or more jurisdictions
        have
        sought to impose sales or other tax obligations on companies that engage
        in
        online commerce within their jurisdictions. A successful assertion by one
        or
        more jurisdictions that we should collect sales or other taxes on our products
        and services, or remit payment of sales or other taxes for prior periods,
        could
        have a material adverse effect on our business, financial condition or results
        of operations.
  Any
        new
        legislation or regulation that may be adopted by the United States Congress
        to
        regulate the Internet, or the application of laws or regulations from
        jurisdictions whose laws do not currently apply to our business, could have
        a
        material adverse effect on our business.
  **Employees**
  As
        of
        March 1, 2006, we had a total of 33 full-time employees. None of our employees
        are covered by a collective bargaining agreement. We believe that our relations
        with our employees are good.
   **Item
        1A.Risk
        Factors**
  ***Risks
        Particular To GoAmerica***
  **We
        have historically incurred losses and these losses will continue in the
        foreseeable future.**
  We
        have
        never earned a profit. We had net losses of $4.4 million, $4.4 million, and
        $8.2
        million for the years ended December 31, 2005, 2004 and 2003, respectively.
        Since our inception, we have invested significant capital to build our wireless
        network operations and e-commerce systems as well as our billing system.
        We also
        have provided mobile devices made by third parties to our customers at prices
        below our costs for such devices. In addition, although we have reduced our
        exposure to subscriber-related costs through our relationship with EarthLink,
        our costs of subscriber revenue, consisting principally of our purchase of
        wireless airtime from network carriers, have historically exceeded our
        subscriber revenue. Further, we have experienced negative overall gross margins,
        which consist of margins on our prepaid revenues, equipment sales and other
        revenue, and may experience negative overall gross margins again in the future.
        We will need to generate increased revenue to become profitable and sustain
        profitability on a quarterly and annual basis.
  13
  We
        may
        not achieve or sustain our revenue or profit goals, and our ability to do
        so
        depends on the factors specified elsewhere in "Risk Factors" as well as on
        a
        number of factors outside of our control, including the extent to which:
  ·
              our
                  competitors announce and develop, or lower the prices of, competing
                  services;
  ·
              wireless
                  network carriers, data providers and manufacturers of mobile devices
                  dedicate resources to selling our services or increase the costs
                  of, or
                  limit the use of, services or devices that we purchase from them;
                  and
  ·
              prices
                  for our services decrease as a result of reduced demand or competitive
                  pressures.
  As
        a
        result, we may not be able to increase revenue or achieve profitability on
        a
        quarterly or annual basis.
   **We
        may be unable to execute our business strategy.**
  Our
        business strategy is centered on the pursuit of certain priorities, centered
        on
        the offering of services to deaf or hard of hearing customers. These priorities
        and the principal risks associated with each priority include:
  ·
              *Growth
                  of wireless services business*.
                  We cannot assure you that we will be able to grow our core business.
                  For
                  us to grow this business internally, we will need to improve our
                  margins
                  and demonstrate an ability to operate profitably. For us to grow
                  by means
                  of product or service acquisitions, we will require additional
                  capital to
                  fund acquisitions and we will confront the risks, described below,
                  inherent in an acquisition strategy.
  ·
              *Development
                  and marketing of new communications services, including branded
                  Internet
                  Protocol and Video Relay Services*.
                  To remain competitive in our primary marketing areas, we must continue
                  to
                  offer innovative products and services. We will be limited in the
                  extent
                  to which we can focus upon technological development by capital
                  constraints, by the time that it takes to commercialize product
                  and
                  service concepts and by the steps that may be taken by our competitors.
                  In
                  our rapidly changing environment, developments that appear to present
                  significant advantages may become obsolete before we are able to
                  benefit
                  from our development efforts. In recent years, our shortage of
                  liquidity
                  has required us to reduce the amount of resources devoted to marketing.
                  We
                  expect that capital constraints will continue to limit our marketing
                  efforts.
  ·
              *Streamlining
                  of operations to enable superior customer support*.
                  Our business model will be materially adversely affected if we
                  are unable
                  to offer superior customer support to deaf and hard of hearing
                  customers.
                  In the past, capital constraints have limited our customer support
                  functions.
  14
  In
        addition to our deaf and hard of hearing services, we develop and market
        prepaid
        calling card services. The market for prepaid calling cards is highly
        competitive and operates on low profit margins. Capital constraints may impede
        our ability to promote our brands or negotiate the most favorable rates with
        our
        suppliers.
  If
        we do
        not respond effectively to these risks, our business could be significantly
        and
        adversely affected.
  We
        may
        need additional funds which, if available, could result in increased interest
        expenses or additional dilution to our stockholders. If additional funds
        are
        needed and are not available, our business could be negatively impacted.
  If
        we
        continue to operate unprofitably, if unanticipated contingencies arise or
        if new
        business opportunities are presented to us, it will be necessary for us to
        raise
        additional capital either through public or private equity or debt financing
        to
        primarily finance the execution of our anticipated strategic initiatives.
        At
        this time, we do not have any bank credit facility or other working capital
        credit line under which we may borrow funds for working capital or other
        general
        corporate purposes. If our plans or assumptions change or are inaccurate
        regarding new lines of business within our target market, timeliness and
        effectiveness of implementation of new services we expect to offer, and/or
        weakness or lack of appreciable growth in our core business, we may be required
        to seek additional capital.
  If
        funds
        are raised through the issuance of equity securities, the percentage ownership
        of our then-current stockholders will be reduced and the holders of new equity
        securities may have rights, preferences or privileges senior to those of
        the
        holders of our common stock. If additional funds are raised through a bank
        credit facility or the issuance of debt securities, the holder of such
        indebtedness would have rights senior to the rights of common stockholders
        and
        the terms of such indebtedness could impose restrictions on our operations.
        If
        we need to raise additional funds, we may not be able to do so on terms
        favorable to us, or at all.
  If
        additional capital is required but is not available on acceptable terms or
        at
        all, we may be required to sell or otherwise dispose of portions of our business
        in order to sustain our operations and implement our new business plan. We
        may
        not be able to effect such sales on satisfactory terms, or at all.
  15
  **Our
        limited cash resources will likely restrict our flexibility and overall
        operations.**
  In
        order
        for us to execute our business plan, it will be necessary for us to continue
        to
        operate under significant budgetary constraints. These constraints limit
        our
        ability to respond to business opportunities or issues as they arise. Since
        the
        wireless communications industry remains in an early stage and its needs
        are
        dynamic, our budgetary constraints may adversely affect our ability to respond
        to market demands and our ability to compete.
  **We
        have only a limited operating history, which makes it difficult to evaluate
        an
        investment in our common stock.**
  We
        have
        only a limited operating history on which you can evaluate our business,
        financial condition and operating results. We face a number of risks encountered
        by early stage technology companies that participate in new technology markets,
        including our ability to:
  ·
              manage
                  our dependence on wireless data services which have only limited
                  market
                  acceptance to date;
  ·
              maintain
                  our engineering and support organizations, as well as our distribution
                  channels;
  ·
              negotiate
                  and maintain favorable usage rates with telecommunications carriers;
  ·
              retain
                  and expand our subscriber base at profitable rates;
  ·
              recoup
                  our expenses associated with the wireless devices we resell to
                  subscribers;
  ·
              manage
                  expanding operations, including our ability to expand our systems
                  if our
                  subscriber base grows substantially;
  ·
              attract
                  and retain management and technical personnel; and
  ·
              anticipate
                  and respond to market competition and changes in technologies.
  We
        may
        not be successful in addressing or mitigating these risks and uncertainties,
        and
        if we are not successful our business could be significantly and adversely
        affected.
  16
  **We
        may acquire or make investments in companies or technologies that could cause
        loss of value to our stockholders and disruption of our business.**
  Subject
        to our capital constraints, we intend to continue to explore opportunities
        to
        acquire companies or technologies in the future, principally as enhancements
        to
        our offerings of products and services to our deaf and hard of hearing
        customers. Entering into an acquisition entails many risks, any of which
        could
        adversely affect our business, including:
  ·
              failure
                  to integrate the acquired assets and/or companies with our current
                  business;
  ·
              the
                  price we pay may exceed the value we eventually realize;
  ·
              loss
                  of share value to our existing stockholders as a result of issuing
                  equity
                  securities as part or all of the purchase price;
  ·
              potential
                  loss of key employees from either our current business or the acquired
                  business;
  ·
              entering
                  into markets in which we have little or no prior experience;
  ·
              diversion
                  of management's attention from other business concerns;
  ·
              assumption
                  of unanticipated liabilities related to the acquired assets; and
  ·
              the
                  business or technologies we acquire or in which we invest may have
                  limited
                  operating histories, may require substantial working capital, and
                  may be
                  subject to many of the same risks we are.
  **Steps
        we have taken in the past few years to respond to our diminished liquidity
        may
        negatively impact our ability to do business in the
        future.**
  We
        have
        taken many steps since 2002 that we may not have taken had we had substantial
        additional liquidity. In addition to our relationship with EarthLink, we
        have
        implemented substantial cost-cutting measures in order to survive. Among
        other
        things, we:
  ·
              reduced
                  our headcount from 225 employees at December 31, 2001 to 32 employees
                  at
                  December 31, 2005;
  ·
              reduced
                  our expenditures on research and development from approximately
                  $4,174,000
                  in 2001 to approximately $363,000 in 2005;
  ·
              reduced
                  our expenditures on advertising from approximately $4,900,000 in
                  2001 to
                  approximately $110,000 in 2005; and
  ·
              reduced
                  our office space under lease from approximately 66,000 total square
                  feet
                  at December 31, 2001 to approximately 10,000 total square feet
                  at December
                  31, 2005.
  17
  We
        understand that our capacity to do business may have been damaged by the
        cutbacks which we were forced to implement. If we are unable to restore our
        capacity, our business could be significantly and adversely
        affected.
   **We
        have limited resources and we may be unable to support effectively our
        operations.**
  We
        must
        continue to develop and expand our systems and operations in order to remain
        competitive. Our need to continually innovate has placed, and we expect it
        to
        continue to place, significant strain on our managerial, operational and
        financial resources. We may be unable to develop and expand our systems and
        operations or implement our business plan for one or more of the following
        reasons:
  ·
              we
                  may not be able to retain at reasonable compensation rates qualified
                  engineers and other employees necessary to expand our capacity
                  on a timely
                  basis;
  ·
              we
                  may not be able to dedicate the capital necessary to effectively
                  develop
                  and expand our systems and operations;
                  and
  ·
              we
                  may not be able to expand our customer service, billing and other
                  related
                  support systems.
  ·
              If
                  we cannot manage our operations effectively, our business and operating
                  results will suffer. Additionally, any failure on our part to develop
                  and
                  maintain our services if we experience rapid growth could significantly
                  adversely affect our reputation and brand name which could reduce
                  demand
                  for our services and adversely affect our business, financial condition
                  and operating results.
  **Our
        business prospects depend in part on our ability to maintain and improve
        our
        services as well as to develop new services.**
 
 We
        believe that our business prospects depend in part on our ability to maintain
        and improve our current services and to develop new services. Our services
        will
        have to achieve market acceptance, maintain technological competitiveness
        and
        meet an expanding range of customer requirements. As a result of the
        complexities inherent in our service offerings, major new wireless data services
        and service enhancements require long development and testing periods. We
        may
        experience difficulties that could delay or prevent the successful development,
        introduction or marketing of new services and service enhancements.
        Additionally, our new services and service enhancements may not achieve market
        acceptance.
  18
  **If
        we do not respond effectively and on a timely basis to rapid technological
        change, our business could suffer.**
 
 The
        communications industry is characterized by rapidly changing technologies,
        industry standards, customer needs and competition, as well as by frequent
        new
        product and service introductions. We must respond to technological changes
        affecting both our customers and suppliers. We may not be successful in
        developing and marketing, on a timely and cost-effective basis, new services
        that respond to technological changes, evolving industry standards or changing
        customer requirements. Our success will depend, in part, on our ability to
        accomplish all of the following in a timely and cost-effective manner:
  ·
              effectively
                  use and integrate new technologies;
  ·
              continue
                  to develop our technical expertise;
  ·
              enhance
                  our engineering and system design
                  capabilities;
  ·
              develop
                  applications for new networks and
                  services;
  ·
              develop
                  services that meet changing customer
                  needs;
  ·
              influence
                  and respond to emerging industry standards and other changes;
                  and
  ·
              advertise
                  and market our services.
  **We
        depend upon carriers’ networks. If we do not have continued access to sufficient
        capacity on reliable networks, our business will suffer.**
 
 Our
        success partly depends on our ability to buy sufficient capacity on or offer
        our
        services over the networks of carriers and on the reliability and security
        of
        their systems. We depend on these companies to provide uninterrupted and
“bug
        free” service and would be adversely affected if they failed to provide the
        required capacity or needed level of service. In recent years, certain carriers
        experienced financial difficulties and sought protection under the bankruptcy
        laws. We cannot assure you that these companies will emerge from bankruptcy
        or
        that others will not seek similar protection. Such bankruptcies may result
        in
        discontinued or interrupted service and fewer network alternatives. In addition,
        although we have some forward price protection in our existing agreements
        with
        certain carriers, we could be adversely affected if carriers were to increase
        the prices of their services. Our existing agreements with the carriers
        generally have one-to-three year terms. Some of these carriers are, or could
        become, our competitors.
  19
  **We
        depend on third parties for sales of certain of our products and services
        which
        could result in variable and unpredictable revenues.**
 
 We
        rely
        substantially on the efforts of others to sell many of our communications
        products and services. Should our relationships with distribution parties
        cease
        or be less successful than anticipated, our business results of operations,
        and
        financial condition would be materially adversely affected. While we monitor
        the
        activities of our distributors and resellers, we cannot control how those
        who
        sell and market our products and services perform and we cannot be certain
        that
        their performance will be satisfactory. If the number of customers we obtain
        through these efforts is substantially lower than we expect for any reason,
        this
        would have a material adverse effect on our business, operating results and
        financial condition.
  **We
        depend on retaining key personnel. The loss of our key employees and the
        inability to recruit talented new personnel could materially adversely affect
        our business.**
 
 Due
        to
        the technical nature of our services and the dynamic market in which we compete,
        our performance depends on retaining and hiring certain key employees, including
        technically proficient personnel. Competitors and others have recruited our
        employees in recent years as we have found it necessary to implement cost
        controls that have reduced the attractiveness of employment with us. A major
        part of our compensation to our key employees is in the form of stock option
        grants. The prolonged depression in our stock price may make it difficult
        for us
        to attract and retain qualified personnel.
  **Systems
        failures could harm our business by injuring our reputation or lead to claims
        of
        liability for delayed, improper or unsecured transmission of data.**
 
 A
        significant barrier to the growth of electronic commerce has been the need
        for
        secure and reliable transmission of confidential information. Our existing
        network services are dependent on near immediate, continuous feeds from various
        sources. The ability of our subscribers to quickly access data requires timely
        and uninterrupted connections with our network carriers. Any significant
        disruption from our backup landline feeds could result in delays in our
        subscribers’ ability to receive such information. In addition, our systems could
        be disrupted by unauthorized access, computer viruses and other accidental
        or
        intentional actions. We may incur significant costs to protect against the
        threat of security breaches or to alleviate problems caused by such breaches.
        If
        a third party were able to misappropriate our subscribers’ personal or
        proprietary information or credit card information, we could be subject to
        claims, litigation or other potential liabilities that could materially
        adversely impact our business. There can be no assurance that our systems
        will
        operate appropriately if we experience a hardware or software failure. A
        failure
        in our systems could cause delays in transmitting data and, as a result,
        we may
        lose customers or face litigation that could materially adversely affect
        our
        business.
  20
  **An
        interruption in the supply of products and services that we obtain from third
        parties could cause a decline in sales of our services.**
 
 In
        designing, developing and supporting our services, we rely on carriers, mobile
        device manufacturers, content providers and software providers. These suppliers
        may experience difficulty in supplying us products or services sufficient
        to
        meet our needs or they may terminate or fail to renew contracts for supplying
        us
        these products or services on terms we find acceptable. Any significant
        interruption in the supply of any of these products or services could cause
        a
        decline in sales of our services, unless and until we are able to replace
        the
        functionality provided by these products and services. We also depend on
        third
        parties to deliver and support reliable products, enhance their current
        products, develop new products on a timely and cost-effective basis and respond
        to emerging industry standards and other technological changes.
  **We
        may face increased competition which may negatively impact our prices for
        our
        services or cause us to lose business opportunities.**
 
 The
        market for our services is becoming increasingly competitive. The widespread
        adoption of industry standards may make it easier for new market entrants
        and
        existing competitors to introduce services that compete against ours. We
        developed our solutions using standard industry development tools. Many of
        our
        agreements with carriers, device manufacturers and data providers are
        non-exclusive. Our competitors may use the same products and services in
        competition with us. With time and capital, it would be possible for competitors
        to replicate our services and offer similar services at a lower price. We
        expect
        that we will compete primarily on the basis of the functionality, breadth,
        quality and price of our services. Our current and potential competitors
        include:
  ·
              wireless
                  carriers, such as Cingular, Verizon Wireless, Velocita, Sprint
                  Nextel and
                  T-Mobile, and distributors such as RACO, WirelessRain and Venecom;
  ·
              relay
                  providers such as AT&T, Sprint Nextel, Verizon/MCI, Sorenson, Hamilton
                  and Communications Services for the Deaf;
                  and
  ·
              prepaid
                  providers such as IDT, STI, VCG**,**Tricom
                  and Codetel.
  Many
        of
        our existing and potential competitors have substantially greater financial,
        technical, marketing and distribution resources than we do. Additionally,
        many
        of these companies have greater name recognition and more established
        relationships with our target customers. Furthermore, these competitors may
        be
        able to adopt more aggressive pricing policies and offer customers more
        attractive terms than we can. In addition, we have established strategic
        relationships with many of our potential competitors. In the event such
        companies decide to compete directly with us, such relationships would likely
        be
        terminated, which could have a material adverse effect on our business and
        reduce our market share or force us to lower prices to unprofitable levels.
  21
  **Our
        intellectual property rights may not be adequately protected under the current
        state of the law.**
  We
        rely
        primarily on trade secret laws, copyright law, trademark law, unfair competition
        law and confidentiality agreements to protect our intellectual property.
        To the
        extent that our technology is not adequately protected by intellectual property
        law, other companies could develop and market similar products or services
        which
        could materially adversely affect our business.
  **We
        may be sued by third parties for infringement of their proprietary rights
        and we
        may incur defense costs and possibly royalty obligations or lose the right
        to
        use technology important to our business.**
  The
        telecommunications and software industries are characterized by protection
        and
        vigorous enforcement of applicable intellectual property rights. As the number
        of participants in our market increases, the possibility of an intellectual
        property claim against us increases. Any intellectual property claims, with
        or
        without merit, could be time consuming and expensive to litigate or settle
        and
        could divert management attention from administering our business. A third
        party
        asserting infringement claims against us or our customers with respect to
        our
        current or future products may materially adversely affect us by, for example,
        causing us to enter into costly royalty arrangements or forcing us to incur
        settlement or litigation costs.
  **We
        may be subject to liability for transmitting certain information, and our
        insurance coverage may be inadequate to protect us from this liability.**
  We
        may be
        subject to claims relating to information transmitted over systems we develop
        or
        operate. These claims could take the form of lawsuits for defamation,
        negligence, copyright or trademark infringement or other actions based on
        the
        nature and content of the materials. Although we carry general liability
        insurance, our insurance may not cover potential claims of this type or may
        not
        be adequate to cover all costs incurred in defense of potential claims or
        to
        indemnify us for all liability that may be imposed.
  **Our
        quarterly operating results are subject to significant fluctuations and,
        as a
        result, period-to-period comparisons of our results of operations are not
        necessarily meaningful.**
  Our
        quarterly operating results may fluctuate significantly in the future as
        a
        result of a variety of factors. These factors include:
  ·
              the
                  demand for and market acceptance of our services;
  ·
              downward
                  price adjustments by our competitors on services they offer that
                  are
                  similar to ours;
  ·
              changes
                  in the mix of services sold by our competitors;
  22
  ·
              technical
                  difficulties or network downtime;
  ·
              the
                  ability to meet any increased technological demands of our customers;
                  and
  ·
              economic
                  conditions specific to our industry.
  Therefore,
        our operating results for any particular quarter may differ materially from
        our
        expectations or those of security analysts and may not be indicative of future
        operating results. The failure to meet expectations may cause the price of
        our
        common stock to decline.
   **If
        we fail to manage growth effectively, our business could be disrupted which
        could harm our operating results.**
  If
        we are
        successful in implementing our business plan, we may experience growth in
        our
        business. In that event, it will be necessary for us to expand our workforce
        and
        to train, motivate and manage additional employees as the need for additional
        personnel arises. Our personnel, systems, procedures and controls may not
        be
        adequate to support our future operations. Any failure to effectively manage
        future growth could have a material adverse effect on our business.
   **We
        are vulnerable to circumstances outside of our control which could seriously
        disrupt our business.**
  Our
        software, as well as any ancillary hardware, is vulnerable to damage or
        interruption from:
  ·
              fire,
                  flood, and other natural disasters;
  ·
              power
                  loss, computer systems failures, Internet and telecommunications
                  or data
                  network failure, operator negligence, improper operation by or
                  supervision
                  of employees, physical and electronic loss of data or security
                  breaches,
                  misappropriation, and similar events;
                  and
  ·
              computer
                  viruses.
  Any
        disruption in the operation of our software, the loss of employees knowledgeable
        about such software, or our failure to continue to effectively modify and
        upgrade such software could interrupt our operations or interfere with our
        ability to provide service to our customers, which could result in reduced
        sales
        and affect our operations and financial performance.
  23
  ***Risks
        Particular To Our Industry***
  **The
        market for our services is new and highly uncertain.**
  The
        market for communications services has grown rapidly in recent years and
        the
        number and variety of competitive services is significant. Current barriers
        to
        market acceptance of these services include cost, reliability, functionality
        and
        ease of use. Based on these factors and competitive aspects of the market,
        we
        cannot be certain of initial or continuing market acceptance of our services.
        If
        the market for our services does not grow or grows slower than we currently
        anticipate, our business, financial condition and operating results could
        be
        materially adversely affected.
  **New
        laws and regulations that impact our industry could materially adversely
        affect
        our business.**
  Aspects
        of our relay and prepaid business are subject to direct regulation and decisions
        by the FCC which could materially adversely affect our business. In addition,
        the carriers who supply us with network access are subject to regulation
        by the
        FCC and regulations that affect them could materially adversely affect our
        business. Our business could suffer significantly depending on the extent
        to
        which our activities or those of our customers or suppliers are regulated.
  ***Risks
        Particular To Stock Price***
  **Our
        stock price, like that of many technology companies, has been and may continue
        to be volatile.**
  We
        expect
        that the market price of our common stock will fluctuate as a result of
        variations in our quarterly operating results and other factors beyond our
        control. These fluctuations may be exaggerated if the trading volume of our
        common stock is low. In addition, due to the technology-intensive and emerging
        nature of our business, the market price of our common stock may rise and
        fall
        in response to a variety of factors, including:
  ·
              announcements
                  of technological or competitive
                  developments;
  ·
              acquisitions
                  or strategic alliances by us or our
                  competitors;
  ·
              the
                  gain or loss of a significant customer or
                  order;
  ·
              changes
                  in estimates of our financial performance or changes in recommendations
                  by
                  securities analysts regarding us or our industry;
                  or
  ·
              general
                  market or economic conditions.
  24
  This
        risk
        may be heightened because our industry is new and evolving, characterized
        by
        rapid technological change and susceptible to the introduction of new competing
        technologies or competitors.
  In
        addition, equity securities of many technology companies have experienced
        significant price and volume fluctuations. These price and volume fluctuations
        often have been unrelated to the operating performance of the affected
        companies. Volatility in the market price of our common stock could result
        in
        securities class action litigation. This type of litigation, regardless of
        the
        outcome, could result in substantial costs and a diversion of management’s
        attention and resources.
  **We
        have issued a substantial number of warrants that enable their holders to
        purchase our common stock at a price of $12.00 per share, which could adversely
        affect the market price of our common stock.**
  As
        a
        result of our 2004 equity financing, we issued warrants to purchase 144,731
        shares of our common stock at a price of $12.00 per share (splits-adjusted),
        of
        which 71,820 remain outstanding.
  The
        significant number of shares that may be issuable at a price which could
        be less
        than the current market price of our common stock could adversely affect
        the
        market price of our common stock.
  The
        issuance in the future of additional authorized shares may have the effect
        of
        diluting the earnings per share and book value per share, as well as the
        stock
        ownership and voting rights, of the currently outstanding shares of our common
        stock. In addition, the existence of authorized, but unissued, shares of
        our
        common stock may be construed as having an anti-takeover effect. We could,
        subject to the board’s fiduciary duties and applicable law, issue such
        authorized shares to purchasers who might oppose a hostile takeover bid or
        any
        efforts to amend or repeal certain provisions of our certificate of
        incorporation or bylaws. Such a use of these additional authorized shares
        could
        render more difficult, or discourage, an attempt to acquire control of us
        through a transaction opposed by the board.
 
  **We
        have anti-takeover defenses that could delay or prevent an acquisition and
        could
        adversely affect the price of our common stock.**
  Provisions
        of our certificate of incorporation and bylaws and provisions of Delaware
        law
        could delay or prevent an acquisition or change of control of GoAmerica or
        otherwise adversely affect the price of our common stock. For example, our
        certificate of incorporation authorizes undesignated preferred stock which
        our
        board of directors can designate and issue without further action by our
        stockholders, establishes a classified board of directors, eliminates the
        rights
        of stockholders to call a special meeting of stockholders, eliminates the
        ability of stockholders to take action by written consent, and requires
        stockholders to comply with advance notice requirements before raising a
        matter
        at a stockholders’ meeting. As a Delaware corporation, we are also subject to
        the Delaware anti-takeover statute contained in Section 203 of the Delaware
        General Corporation Law.
  25
 
 **We
        do not intend to pay dividends on our common stock.**
  We
        have
        never paid or declared any cash dividends on our common stock or other
        securities and intend to retain any future earnings to finance the development
        and expansion of our business. We do not anticipate paying any cash dividends
        on
        our common stock in the foreseeable future. Unless we pay dividends, our
        stockholders will not be able to receive a return on their shares unless
        they
        sell them.
  **Item
        1B.          Unresolved Staff
        Comments**
  Not
        applicable.
  **Item
        2.  Properties.**
  We
        own no
        real property. Our principal offices are located at 433 Hackensack Avenue
        in
        Hackensack, New Jersey, consisting of approximately 10,000 square feet that
        we
        lease through July 2007. We believe that our current facilities are adequate
        to
        support our existing operations *.*
  **Item
        3.  Legal
        Proceedings.**
  On
        September 22, 2004, Boundless Depot, LLC ("Boundless Depot") and Scott Johnson,
        one of two Boundless Depot shareholders, sued GoAmerica and Wynd Communications
        in the Superior Court of the State of California for the County of Los Angeles,
        claiming damages of one million dollars for GoAmerica's refusal to pay Boundless
        Depot unattained contingent consideration, comprising cash and/or GoAmerica
        Common Stock, with respect to the Asset Purchase Agreement dated as of February
        8, 2003 (the "Deafwireless Agreement"), pursuant to which GoAmerica and Wynd
        Communications acquired certain Deafwireless assets. The total value of such
        contingent consideration, if all contingencies had been fully met and amounts
        paid immediately thereupon, would not have exceeded $211,000; however, we
        do not
        believe any of the contingent consideration is owed to Boundless Depot or
        either
        of its shareholders since conditions of the Deafwireless Agreement were not
        met
        and we incurred costs for which we are entitled to receive reimbursement
        from
        Boundless Depot or offset against any amounts that may become payable to
        Boundless Depot. Upon petition by GoAmerica and Wynd Communications, the
        Court
        has ordered this matter into arbitration, which process is now pending. We
        intend to defend this action vigorously and may elect to pursue
        counterclaims.
  26
  **Item
            4.** **Submission
            of Matters to a Vote of Security Holders.**
  The
        Annual Meeting of Stockholders was held on December 13, 2005. There were
        present
        at the Annual Meeting, in person or by proxy, stockholders holding an aggregate
        of 1,691,729 shares of Common Stock out of a total number of 2,093,451 shares
        of
        Common Stock issued and outstanding and entitled to vote at the Annual Meeting.
        The results of the vote taken at such Annual Meeting with respect to the
        election of the nominees to be our Class B directors as elected by the holders
        of the Common Stock to hold office until the 2008 Annual Meeting were as
        follows:
 
 Nominees
              For
              WithheldDaniel
                  R. Luis
              1,639,943
              51,786David
                  Lyons
              1,649,310
              42,419
 
 Aaron
        Dobrinsky, Alan Docter and King Lee continued their terms as Class C directors,
        such terms expiring at the 2006 Annual Meeting of Stockholders, and Joseph
        Korb
        and Mark Kristoff continued their terms as Class A directors, such terms
        expiring at the 2007 Annual Meeting of Stockholders.
 
 The
        results of the vote taken at such annual meeting with respect to adoption
        of the
        GoAmerica, Inc. 2005 Equity Compensation Plan were as follows:
 
 For
              Against
              Abstain92,339
              68,415
              1,878
  
 **Item
            4A.** **Executive
            Officers of the Registrant**
 
 The
        following table identifies the current executive officers of the
        Company:
 
 NAME
              AGE
              CAPACITIES
                  IN
                WHICH
                  SERVING
              IN
                  CURRENT
                POSITION
                  SINCEDaniel
                  R. Luis
              39
              Chief
                  Executive Officer and Director
              2003Donald
                  Barnhart
              48
              Chief
                  Financial Officer
              2004Jesse
                  Odom
              40
              Chief
                  Technology Officer
              2000Wayne
                  D. Smith
              47
              Executive
                  Vice President, General Counsel and Secretary
              2005
 ____________
  27
  Daniel
        Luis joined our Board of Directors in January 2003 at the time he was elected
        our Chief Executive Officer. He previously served as our President and Chief
        Operating Officer from May 2002 until January 2003. Mr. Luis is also President
        and Chief Executive Officer of Wynd Communications Corporation, which became
        a
        wholly owned subsidiary of GoAmerica in June 2000. Mr. Luis joined Wynd in
        1994
        and has held his current positions with Wynd since 1998.
 
 Donald
        Barnhart joined GoAmerica in 1999 and became its Vice President and Controller
        in 2000. He was appointed Chief Financial Officer in March 2004. Prior to
        joining GoAmerica, Mr. Barnhart was employed by Bogen Communications (a
        telecommunications manufacturer) as its Accounting Manager and operated his
        own
        accounting and consulting firm. Mr. Barnhart is a CPA in New Jersey and is
        a
        graduate of Rutgers University.
 
 Jesse
        Odom joined GoAmerica in 1996 as Vice President of Network Operations. He
        was
        appointed Chief Technology Officer in November 2000.
 
 Wayne
        Smith joined GoAmerica in May 2002 as Vice President, General Counsel and
        was
        appointed corporate Secretary in November 2003. He was appointed Executive
        Vice
        President, General Counsel and Secretary in March 2005. Prior to joining
        GoAmerica, Mr. Smith held a variety of legal and staff positions with Viacom
        Inc. (a diversified entertainment company) from 1985 to 2001, most recently
        serving as Vice President, Corporate Counsel.
 
 None
        of
        our executive officers is related to any other executive officer or to any
        director of the Company.
  28
  **PART
        II**
  **Item
            5.** **Market
            for the Registrant’s Common Equity, Related Stockholder Matters and Issuer
            Purchases of Equity Securities.**
  **Market
        for our Common Stock**
  Our
        common stock traded on the Nasdaq National Market from our initial public
        offering in April 2000 until August 28, 2002, at which time our listing moved
        to
        the Nasdaq Capital Market, where it continues to trade under the symbol
        "GOAM".
  The
        following table sets forth the high and low sales prices for our common stock
        for the quarters indicated as reported on the Nasdaq National Market and
        Nasdaq
        Capital Market.
 **Quarter
                    Ended**
                **High**
                
                **Low**March
                    31, 2004
                $56.80
                
                $14.40June
                    30, 2004
                $20.00
                
                $6.32September
                    30, 2004
                $6.88
                
                $2.56December
                    31, 2004
                $14.50
                
                $2.48March
                    31, 2005
                $10.25
                
                $5.03June
                    30, 2005
                $8.08
                
                $5.39September
                    30, 2005
                $7.65
                
                $3.55December
                    31, 2005
                $7.65
                
                $3.75
 
 As
        of
        March 24, 2006, the approximate number of holders of record of our common
        stock
        was 100 and the approximate number of beneficial holders of our common stock
        was
        approximately 15,000.
 
 The
        following table gives information about the Company’s Common Stock that may be
        issued upon the exercise of options, warrants and rights under
        the GoAmerica, Inc. 1999 Stock Plan, the GoAmerica Communications Corp.
        1999 Stock Option Plan and the GoAmerica, Inc. 2005 Equity Compensation Plan
        as
        of December 31, 2005. These plans were the Company’s only equity compensation
        plans in existence as of December 31, 2005.
  **(a)**
                **Number
                  Of Securities to be**
                **Issued
                  Upon Exercise of**
                **Outstanding
                  Options,**
                **Warrants
                  and Rights**
              **(b)**
                **Weighted-Average
                  Exercise**
                **Price
                  of Outstanding**
                **Options,
                  Warrants and**
                **Rights**
              **Number
                  of Securities**
                **Remaining
                  Available for**
                **Future
                  Issuance Under Equity**
                **Compensation
                  Plans**
                **(Excluding
                  Securities**
                **Reflected
                  in**
                **Column
                  (a))**Equity
                  Compensation PlansApproved
                  byShareholders
              336,428
              $46.14
              155,000Equity
                  Compensation PlansNot
                  Approved byShareholders
              --
              --
              --Total
              336,428
              $46.14
              155,000
  29
  On
        November 8, 2005, in connection with the execution of new employment agreements
        with each of our four executive officers, we issued a total of
        245,000 restricted shares of our Common Stock to said officers, subject to
        the approval by our stockholders of the GoAmerica, Inc. 2005 Equity Compensation
        Plan, which plan was approved at our 2005 Annual Meeting of Stockholders
        on
        December 13, 2005. These shares were unregisterd and we relied on the private
        placement exemption contained in Section 4(2) of the Securities Act of
        1933.
 
 **Related
        Stockholder Matters**
 
 We
        have
        never declared or paid any cash dividends on our common stock. We intend
        to
        retain earnings, if any, to fund future growth and the operation of our
        business.
  **Item
            6.** **Selected
            Consolidated Financial Data.**
  The
        selected consolidated financial data set forth below with respect to our
        statement of operations data for the years ended December 31, 2005, 2004
        and
        2003, and with respect to the consolidated balance sheet data at December
        31,
        2005 and 2004 are derived from and are qualified by reference to our audited
        consolidated financial statements and related notes thereto presented elsewhere
        herein. Our selected consolidated statement of operations data for the years
        ended December 31, 2002 and 2001 and consolidated balance sheet data as of
        December 31, 2003, 2002 and 2001 are derived from audited consolidated
        financial statements not included in this Annual Report on Form 10-K. The
        selected consolidated financial data set forth below should be read in
        conjunction with, and is qualified in its entirety by, our audited consolidated
        financial statements and related notes thereto and "Item 7. Management's
        Discussion and Analysis of Financial Condition and Results of Operations",
        which
        are included elsewhere in this Annual Report on Form 10-K.
  30
  **Years
                  Ended December 31,****(In
                  thousands, except for per share data)****2005**
              
              **2004**
              
              **2003**
              
              **2002**
              
              **2001****Consolidated
                  Statement of Operations Data:**Revenues:Subscriber
              
              $
              2,348
              
              $
              5,588
              
              $
              10,108
              
              $
              29,017
              
              $
              28,308Prepaid
                  services
              
              
              3,147
              
              
              193
              
              
              --
              
              
              --
              
              
              --Relay
                  services
              
              
              1,261
              
              
              --
              
              
              --
              
              
              --
              
              
              --Commissions
              
              
              755
              
              
              --
              
              
              --
              
              
              --
              
              
              --Equipment
              
              
              442
              
              
              181
              
              
              1,042
              
              
              6,560
              
              
              10,088Other
              
              
              125
              
              
              260
              
              
              728
              
              
              335
              
              
              618Total
                  revenue
              
              
              8,078
              
              
              6,222
              
              
              11,878
              
              
              35,912
              
              
              39,014Costs
                  and expenses:Cost
                  of subscriber revenue
              
              
              967
              
              
              2,539
              
              
              2,669
              
              
              20,434
              
              
              22,578Cost
                  of equipment revenue
              
              
              585
              
              
              260
              
              
              1,152
              
              
              8,537
              
              
              20,665Cost
                  of network operations
              
              
              231
              
              
              733
              
              
              1,828
              
              
              3,074
              
              
              3,264Cost
                  of prepaid services
              
              
              3,617
              
              
              201
              
              
              --
              
              
              --
              
              
              --Sales
                  and marketing
              
              
              1,167
              
              
              597
              
              
              1,072
              
              
              8,038
              
              
              24,700General
                  and administrative
              
              
              5,320
              
              
              5,625
              
              
              9,617
              
              
              29,082
              
              
              40,685Research
                  and development
              
              
              363
              
              
              507
              
              
              1,209
              
              
              3,456
              
              
              4,174Depreciation
                  and amortization of fixed assets
              
              
              485
              
              
              804
              
              
              1,912
              
              
              4,342
              
              
              2,987Amortization
                  of other intangibles
              
              
              639
              
              
              682
              
              
              1,081
              
              
              1,483
              
              
              18,398Impairment
                  of goodwill
              
              
              --
              
              
              --
              
              
              193
              
              
              8,400
              
              
              12,991Impairment
                  of other intangible assets
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              12,423Impairment
                  of other long-lived assets
              
              
              --
              
              
              --
              
              
              1,202
              
              
              5,582
              
              
              97Total
                  costs and expenses
              
              
              13,374
              
              
              11,948
              
              
              21,935
              
              
              92,428
              
              
              162,962Loss
                  from operations
              
              
              (5,296
              )
              
              (5,726
              )
              
              (10,057
              )
              
              (56,516
              )
              
              (123,948
              )Other
                  income:Gain
                  on sale of subscribers
              
              
              --
              
              
              --
              
              
              1,756
              
              
              --
              
              
              --Settlement
                  gains, net
              
              
              --
              
              
              1,494
              
              
              85
              
              
              --
              
              
              --Interest
                  (expense) income, net
              
              
              160
              
              
              (944
              )
              
              (275
              )
              
              191
              
              
              3,099Total
                  other income
              
              
              160
              
              
              550
              
              
              1,566
              
              
              191
              
              
              3,099Net
                  loss before benefit from income taxes
              
              
              (5,136
              )
              
              (5,176
              )
              
              (8,491
              )
              
              (56,325
              )
              
              (120,849
              )Income
                  tax benefit
              
              
              764
              
              
              732
              
              
              284
              
              
              436
              
              
              578Net
                  loss
              
              $
              (4,372
              )
              $
              (4,444
              )
              $
              (8,207
              )
              $
              (55,889
              )
              $
              (120,271
              )Basic
                  net loss per share applicable to common stockholders
              
              $
              (2.05
              )
              $
              (2.49
              )
              $
              (12.10
              )
              $
              (83.04
              )
              $
              (181.45
              )Diluted
                  net loss per share applicable to common stockholders
              
              $
              (2.05
              )
              $
              (2.49
              )
              $
              (12.10
              )
              $
              (83.00
              )
              $
              (180.34
              )Weighted
                  average shares used in computation of basic net loss per share
                  applicable
                  to common stockholders
              
              
              2,129
              
              
              1,785
              
              
              678
              
              
              673
              
              
              663Weighted
                  average shares used in computation of diluted net loss per share
                  applicable to common stockholders
              
              
              2,129
              
              
              1,785
              
              
              678
              
              
              673
              
              
              667
  31
  **As
                  of December 31,****(In
                  thousands)****2005**
              
              **2004**
              
              **2003**
              
              **2002**
              
              **2001****Balance
                  Sheet Data:**Cash
                  and cash equivalents
              
              $
              4,804
              
              $
              7,098
              
              $
              568
              
              $
              4,982
              
              $
              34,977Working
                  capital (deficit)
              
              
              4,702
              
              
              8,530
              
              
              (2,656
              )
              
              (1,037
              )
              
              33,292Total
                  assets
              
              
              14,075
              
              
              17,986
              
              
              12,965
              
              
              26,765
              
              
              87,785Total
                  stockholders' equity
              
              
              12,498
              
              
              16,814
              
              
              7,142
              
              
              13,017
              
              
              66,413
 
 
 **Item
            7.** **Management's
            Discussion and Analysis of Financial Condition and Results of
            Operations.**
  *You
        should read the following discussion of our financial condition and results
        of
        operations in conjunction with the consolidated financial statements and
        the
        notes thereto included elsewhere in this Annual Report on Form 10-K. The
        results
        shown in this Annual Report on Form 10-K are not necessarily indicative of
        the
        results we will achieve in any future periods.*
  **Overview**
  GoAmerica®
        is a communications service provider, offering solutions primarily for
        consumenrs who are deaf, hard of hearing and/or speech impaired, including
        wireless subscription and value added services, Internet relay services and
        wireless devices and accessories. Wynd Communications Corporation, a wholly
        owned subsidiary of GoAmerica offers enhanced services known as WyndTell® and
        WyndPowerTM, which assist our deaf or hard of hearing customers in communicating
        from most major metropolitan areas in the continental United States and parts
        of
        Canada. Our i711.comTM telecommunications relay service was launched in March 2005 and enables people
        who are deaf or hard of hearing to call and “converse” with hearing parties by
        using a computer, wireless handheld device or similar unit, through an operator
        that interprets text to voice and vice versa. Throughout 2005, we provided
        a
        wireless version of relay services under a license to Sprint-Nextel, which
        was
        marketed under a Sprint brand. GoAmerica continues to support customers who
        use
        our proprietary software technology called Go.Web Ô .
        GoWeb
        is designed for use mainly by enterprise customers to enable secure wireless
        access to corporate data and the Internet on numerous wireless computing
        devices. In September 2004, we launched our GA PrepaidTM division and expanded
        our product portfolio by commencing to offer prepaid products and services,
        such
        as domestic and international calling cards, prepaid cellular/wireless
        telephones and related services. On December 1, 2004, we acquired certain
        assets
        from Global InteractiveTM, an established provider of wireless products, services
        and accessories.
  Historically,
        we have derived our revenue primarily from the sale of basic and value-added
        wireless data services and the sale of related mobile devices to our
        subscribers. We have provided mobile devices made by third parties to our
        customers at prices below our costs for such devices. We have incurred operating
        losses since our inception. We
        will
        need to significantly improve our overall gross margins, and further reduce
        our
        selling, general and administrative expenses, as a percentage of revenue,
        to
        become profitable and sustain profitability on a quarterly or annual basis.
        We
        will seek to grow our wireless communicatons business through additional
        strategic alliances or new service offerings.
  32
 
 Our
        subscriber revenue primarily consists of monthly service fees, which we
        recognize as revenue when the services are provided to the subscriber.
        Subscriber revenue accounted for approximately 29.1%, 89.8% and 85.1% of
        our
        total revenue during 2005, 2004 and 2003, respectively. Our service plans,
        which
        are marketed through Wynd, provide data usage on multiple mobile devices
        through
        variable and fixed monthly fees ranging from $9.95 to $39.95.
  We
        began providing relay services in late March 2005. Revenue from relay services
        is recognized as revenue when services are provided or earned, primarily
        from a
        third party administrator. Relay services revenue accounted for approximately
        15.6% of our total revenue during 2005.
  Revenue
        from commissions is recognized upon activation of subscribers on behalf of
        third
        party wireless network providers. Commission revenue accounted for approximately
        9.3% of our total revenue during 2005. We also typically sell third-party
        mobile
        devices in conjunction with a service agreement to a new subscriber. Equipment
        revenue accounted for approximately 5.5%, 2.9% and 8.8% of our total revenue
        during 2005, 2004 and 2003, respectively.
  We
        recognize equipment revenue at the time of the shipment of the mobile device
        to
        a subscriber.
  We
        began
        marketing prepaid calling cards in late 2004 and recognize revenue when usage
        of
        the cards occurs and/or administrative fees are imposed. Prepaid services
        revenue accounted for approximately 39.0% and 3.1% of our total revenue during
        2005 and 2004, respectively.
  In
        addition, we historically have generated other revenue which consists of
        consulting services relating to the development and implementation of wireless
        data systems for certain corporate customers. We anticipate that our
        professional service revenues will decrease as a percentage of our total
        revenues during 2006 from prior year levels as a result of our decision not
        to
        pursue certain consulting projects and consulting services to third parties.
  Our
        sales
        and marketing expenses consist primarily of compensation and related costs
        for
        marketing personnel, advertising and promotions, travel and entertainment
        and
        other related costs. We expect sales and marketing expenses to increase as
        a
        percentage of sales during 2006 as compared to 2005 as we introduce new products
        and services to the consumer marketplace. Our general and administrative
        expenses consist primarily of compensation and related costs for general
        corporate and business development, along with rent and other related costs.
        We
        expect general and administrative expenses to decrease as a percentage of
        our
        annual revenues. Our research and development expenses consist primarily
        of
        compensation and related costs and professional service fees. Depreciation
        and
        amortization expenses consist primarily of depreciation expenses arising
        from
        equipment purchased for our network operations center and other property
        and
        equipment purchases.
  We
        recorded interest income during 2005 as a result of the deferred debt described
        below being fully amortized as of December 31, 2004. In 2004, net interest
        expense consisted primarily of amortization of deferred debt expense and
        was
        partially offset by interest earned on cash and cash equivalents. We expect
        interest income to decrease slightly during 2006.
  33
  On
        December 19, 2003, we announced plans for a strategic re-focusing premised
        on a
        financing that we completed in 2004. Such strategy was centered on the pursuit
        of three priorities, centered on the market currently serviced by our Wynd
        Communications subsidiary:
 
 ·
              growth
                  of Wynd Communications’ core wireless services business;
 ·
              development
                  and marketing of new communications services, including branded
                  Internet
                  protocol and video relay services; and
 ·
              streamlined
                  operations to enable superior customer support.
 
 On
        September 1, 2004, the Company purchased certain assets relating to prepaid
        telephone calling cards. On December 1, 2004, the Company acquired certain
        assets from Global Interactive, a provider of wireless products, services,
        and
        accessories in an effort to aid the growth of Wynd Communications’ core wireless
        services business referenced above.
 
  **Critical
        Accounting Policies and Estimates**
  Management’s
        Discussion and Analysis of Financial Condition and Results of Operations
        discusses our consolidated financial statements, which have been prepared
        in
        accordance with accounting principles generally accepted in the United States.
        The preparation of these financial statements requires management to make
        estimates and judgments that affect the reported amounts of assets, liabilities,
        revenues and expenses, and the related disclosure of contingent assets and
        liabilities. On an on-going basis, management evaluates its estimates and
        judgments, including those related to revenue recognition, allowance for
        doubtful accounts, inventory valuation and recoverability of our intangible
        assets. Management bases its estimates and judgments on historical experience
        and on various other factors that are believed to be reasonable under the
        circumstances, the results of which form 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 these estimates under different
        assumptions or conditions.
  Management
        believes the following critical accounting policies, among others, affect
        its
        more significant judgments and estimates used in the preparation of its
        consolidated financial statements. Historically, we have derived our revenue
        primarily from the sale of basic and value-added wireless data services and
        the
        sale of related mobile devices. Subscriber revenue consists primarily of
        monthly
        charges for access and usage and is recognized as the services are provided.
        Equipment revenue is recognized upon shipment to the end user. Revenue from
        relay services is recognized as revenue when services are provided or earned,
        primarily from a third party administrator. Revenue from commissions is
        recognized upon activation of subscribers on behalf of third party wireless
        network providers. Revenue from sale of prepaid calling cards is deferred
        upon
        sale of the cards. These deferred revenues are recognized as earned when
        usage
        of the cards occurs and/or administrative fees are imposed. We estimate the
        collectibility of our trade receivables. A considerable amount of judgment
        is
        required in assessing the ultimate realization of these receivables, including
        analysis of historical collection rates and the current credit-worthiness
        of
        significant customers. Significant changes in required reserves have been
        recorded in recent periods and may occur in the future due to the current
        market
        conditions. We write down inventory for estimated excess or obsolete inventory
        equal to the difference between the cost of inventory and the estimated market
        value based upon assumptions about future demand and market conditions. If
        actual market conditions are less favorable than those projected by management,
        additional inventory write-downs may be required. In assessing the
        recoverability of our goodwill, other intangibles and other long-lived assets,
        we must make assumptions regarding estimated future cash flows. If such
        assumptions change in the future, we may be required to record impairment
        charges for these assets not previously recorded.
  34
  **Results
        of Operations**
  The
        following table sets forth, for the years ended December 31, 2005, 2004 and
        2003, the percentage relationship to net revenues of certain items included
        in
        the Company’s consolidated statements of operations.
 **(In
                            thousands)**
                        
                        **2005**
                        
                        **2004**
                        
                        **2003****$**
                        ****
                        **%**
                        ****
                        **$**
                        ****
                        **%**
                        ****
                        **$**
                        ****
                        **%****Revenues:**Subscriber
                        
                        $
                        2,348
                        
                        
                        29.1
                        
                        $
                        5,588
                        
                        
                        89.8
                        
                        $
                        10,108
                        
                        
                        85.1Prepaid
                            services
                        
                        
                        3,147
                        
                        
                        39.0
                        
                        
                        193
                        
                        
                        3.1
                        
                        
                        --
                        
                        
                        --Relay
                            services
                        
                        
                        1,261
                        
                        
                        15.6
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --Commissions
                        
                        
                        755
                        
                        
                        9.3
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --Equipment
                        
                        
                        442
                        
                        
                        5.5
                        
                        
                        181
                        
                        
                        2.9
                        
                        
                        1,042
                        
                        
                        8.8Other
                        
                        
                        125
                        
                        
                        1.5
                        
                        
                        260
                        
                        
                        4.2
                        
                        
                        728
                        
                        
                        6.18,078
                        
                        
                        100.0
                        
                        
                        6,222
                        
                        
                        100.0
                        
                        
                        11,878
                        
                        
                        100.0**Costs
                            and expenses:**Cost
                            of subscriber airtime
                        
                        
                        967
                        
                        
                        12.0
                        
                        
                        2,539
                        
                        
                        40.8
                        
                        
                        2,669
                        
                        
                        22.5Cost
                            of equipment revenue
                        
                        
                        585
                        
                        
                        7.2
                        
                        
                        260
                        
                        
                        4.2
                        
                        
                        1,152
                        
                        
                        9.7Cost
                            of network operations
                        
                        
                        231
                        
                        
                        2.9
                        
                        
                        733
                        
                        
                        11.8
                        
                        
                        1,828
                        
                        
                        15.4Cost
                            of prepaid services
                        
                        
                        3,617
                        
                        
                        44.8
                        
                        
                        201
                        
                        
                        3.2
                        
                        
                        --
                        
                        
                        --Sales
                            and marketing
                        
                        
                        1,167
                        
                        
                        14.4
                        
                        
                        597
                        
                        
                        9.6
                        
                        
                        1,072
                        
                        
                        9.0General
                            and administrative
                        
                        
                        5,320
                        
                        
                        65.9
                        
                        
                        5,625
                        
                        
                        90.4
                        
                        
                        9,617
                        
                        
                        81.0Research
                            and development
                        
                        
                        363
                        
                        
                        4.5
                        
                        
                        507
                        
                        
                        8.1
                        
                        
                        1,209
                        
                        
                        10.2Depreciation
                            and amortization
                        
                        
                        485
                        
                        
                        6.0
                        
                        
                        804
                        
                        
                        12.9
                        
                        
                        1,912
                        
                        
                        16.1Amortization
                            of other intangibles
                        
                        
                        639
                        
                        
                        7.9
                        
                        
                        682
                        
                        
                        11.0
                        
                        
                        1,081
                        
                        
                        9.1Impairment
                            of goodwill
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        193
                        
                        
                        1.6Impairment
                            of other long lived assets
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        1,202
                        
                        
                        10.113,374
                        
                        
                        165.6
                        
                        
                        11,948
                        
                        
                        192.0
                        
                        
                        21,935
                        
                        
                        184.7Loss
                            from operations
                        
                        
                        (5,296
                        )
                        
                        (65.6
                        )
                        
                        (5,726
                        )
                        
                        (92.0
                        )
                        
                        (10,057
                        )
                        
                        (84.7
                        )**Other
                            income (expense):**Gain
                            on sale of subscribers
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        --
                        
                        
                        1,756
                        
                        
                        14.8Settlement
                            gains, net
                        
                        
                        --
                        
                        
                        --
                        
                        
                        1,494
                        
                        
                        24.0
                        
                        
                        85
                        
                        
                        0.7Interest
                            income (expense), net
                        
                        
                        160
                        
                        
                        2.0
                        
                        
                        (944
                        )
                        
                        (15.2
                        )
                        
                        (275
                        )
                        
                        (2.3
                        )Total
                            other income
                        
                        
                        160
                        
                        
                        2.0
                        
                        
                        550
                        
                        
                        8.8
                        
                        
                        1,566
                        
                        
                        13.2Net
                            loss before benefit from income taxes
                        
                        
                        (5,136
                        )
                        
                        (63.6
                        )
                        
                        (5,176
                        )
                        
                        (83.2
                        )
                        
                        (8,491
                        )
                        
                        (71.5
                        )Income
                            tax benefit
                        
                        
                        764
                        
                        
                        9.5
                        
                        
                        732
                        
                        
                        11.8
                        
                        
                        284
                        
                        
                        2.4Net
                            loss
                        
                        $
                        (4,372
                        )
                        
                        (54.1
                        )
                        
                        (4,444
                        )
                        
                        (71.4
                        )
                        $
                        (8,207
                        )
                        
                        (69.1
                        )
  35
  The
        following table sets forth the period over period percentage increases or
        decreases of certain items included in the Company's consolidated statements
        of
        operations.
 **Years
                    Ended December 31,**
                
                **Years
                    Ended December 31,****(In
                    thousands)**
                
                
                
                **Change**
                
                
                
                **Change****2005**
                
                **2004**
                
                **$**
                ****
                **%**
                
                **2004**
                
                **2003**
                
                **$**
                ****
                **%****Revenues:**Subscriber
                
                $
                2,348
                
                $
                5,588
                
                $
                (3,240
                )
                
                (58.0
                )
                $
                5,588
                
                $
                10,108
                
                $
                (4,520
                )
                
                (44.7
                )Prepaid
                    services
                
                
                3,147
                
                
                193
                
                
                2,954
                
                
                1530.6
                
                
                193
                
                
                --
                
                
                193
                
                
                --Relay
                    services
                
                
                1,261
                
                
                --
                
                
                1,261
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                --Commissions
                
                
                755
                
                
                --
                
                
                755
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                --Equipment
                
                
                442
                
                
                181
                
                
                261
                
                
                144.2
                
                
                181
                
                
                1,042
                
                
                (861
                )
                
                (82.6
                )Other
                
                
                125
                
                
                260
                
                
                (135
                )
                
                (51.9
                )
                
                260
                
                
                728
                
                
                (468
                )
                
                (64.3
                )8,078
                
                
                6,222
                
                
                1,856
                
                
                29.8
                
                
                6,222
                
                
                11,878
                
                
                (5,656
                )
                
                (47.6
                )**Costs
                    and expenses:**Cost
                    of subscriber airtime
                
                
                967
                
                
                2,539
                
                
                (1,572
                )
                
                (61.9
                )
                
                2,539
                
                
                2,669
                
                
                (130
                )
                
                (4.9
                )Cost
                    of equipment revenue
                
                
                585
                
                
                260
                
                
                325
                
                
                125.0
                
                
                260
                
                
                1,152
                
                
                (892
                )
                
                (77.4
                )Cost
                    of network operations
                
                
                231
                
                
                733
                
                
                (502
                )
                
                (68.5
                )
                
                733
                
                
                1,828
                
                
                (1,095
                )
                
                (59.9
                )Cost
                    of prepaid services
                
                
                3,617
                
                
                201
                
                
                3,416
                
                
                1699.5
                
                
                201
                
                
                --
                
                
                201
                
                
                --Sales
                    and marketing,
                
                
                1,167
                
                
                597
                
                
                570
                
                
                95.5
                
                
                597
                
                
                1,072
                
                
                (475
                )
                
                (44.3
                )General
                    and administrative
                
                
                5,320
                
                
                5,625
                
                
                (305
                )
                
                (5.4
                )
                
                5,625
                
                
                9,617
                
                
                (3,992
                )
                
                (41.5
                )Research
                    and development
                
                
                363
                
                
                507
                
                
                (144
                )
                
                (28.4
                )
                
                507
                
                
                1,209
                
                
                (702
                )
                
                (58.1
                )Depreciation
                    and amortization
                
                
                485
                
                
                804
                
                
                (319
                )
                
                (39.7
                )
                
                804
                
                
                1,912
                
                
                (1,108
                )
                
                (57.9
                )Amortization
                    of other intangibles
                
                
                639
                
                
                682
                
                
                (43
                )
                
                (6.3
                )
                
                682
                
                
                1,081
                
                
                (399
                )
                
                (36.9
                )Depreciation
                    and amortization
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                193
                
                
                (193
                )
                
                --Amortization
                    of other intangibles
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                1,202
                
                
                (1,202
                )
                
                --13,374
                
                
                11,948
                
                
                1,426
                
                
                11.9
                
                
                11,948
                
                
                21,935
                
                
                (9,987
                )
                
                (45.5
                )Loss
                    from operations
                
                
                (5,296
                )
                
                (5,726
                )
                
                430
                
                
                (7.5
                )
                
                (5,726
                )
                
                (10,057
                )
                
                4,331
                
                
                (43.1
                )**Other
                    income (expense):**Gain
                    on sale of subscribers
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                --
                
                
                1,756
                
                
                (1,756
                )
                
                --Settlement
                    gains, net
                
                
                --
                
                
                1,494
                
                
                (1494
                )
                
                (100.0
                )
                
                1,494
                
                
                85
                
                
                1,409
                
                
                1657.6Interest
                    income (expense), net
                
                
                160
                
                
                (944
                )
                
                1,104
                
                
                (116.9
                )
                
                (944
                )
                
                (275
                )
                
                (669
                )
                
                243.3Total
                    other income
                
                
                160
                
                
                550
                
                
                (390
                )
                
                (70.9
                )
                
                550
                
                
                1,566
                
                
                (1,016
                )
                
                (64.9
                )Net
                    loss before benefit from income taxes
                
                
                (5,136
                )
                
                (5,176
                )
                
                40
                
                
                0.8
                
                
                (5,176
                )
                $
                (8,491
                )
                
                3,315
                
                
                39.0Income
                    tax benefit
                
                
                764
                
                
                732
                
                
                32
                
                
                4.4
                
                
                732
                
                
                284
                
                
                448
                
                
                157.7Net
                    loss
                
                
                (4,372
                )
                $
                (4,444
                )
                $
                72
                
                
                (1.6
                )
                $
                (4,444
                )
                $
                (8,207
                )
                $
                3,763
                
                
                (45.9
                )
  **Year
        Ended December 31, 2005 Compared to Year Ended December 31, 2004**
  ***Consolidated***
  *Subscriber
        revenue.* Subscriber revenue decreased to $2.3 million for the year ended December
        31,
        2005 from $5.6 million for the year ended December 31, 2004. This decrease
        was
        primarily due to declines in our full service offering subscriber base, as
        well
        as, our Go.Web customers. This decline was partially offset by increased
        subscribers to our value added WyndPower service. Our subscriber base decreased
        to 22,718 subscribers at December 31, 2005 from 56,026 subscribers at December
        31, 2004. We expect the number of our subscribers to continue to decline
        due to
        additional deactivations in our Go.Web subscriber base. Our average monthly
        revenue per user, or ARPU, decreased to $4.97 for the year ended December
        31,
        2005 from $7.10 for the year ended December 31, 2004.
  *Prepaid
        services revenue.* We
        began marketing prepaid calling cards in late 2004 and recognized $3.1 million
        of prepaid service revenue for the year ended December 31, 2005 compared
        to
        $193,000 for the year ended December 31, 2004.
  36
  *Relay
        services revenue.* We
        began providing relay services in late March 2005 and recognized $1.3 million
        of
        relay service revenue for the year ended December 31, 2005. We did not provide
        comparable relay services during 2004.
  *Commission
        revenue.* We
        began earning commission during 2005 from our acquisition of subscribers
        on
        behalf of various wireless network providers and recognized $755,000 of
        commission revenue for the year ended December 31, 2005. We did not provide
        comparable services during 2004. We expect commission revenue to increase
        as we
        continue to acquire subscribers on behalf of various wireless network
        providers.
  *Equipment
        revenue.* Equipment revenue increased to $442,000 for the year ended December 31, 2005
        from $181,000 for the year ended December 31, 2004. This increase was primarily
        due to higher sales of mobile devices as a result of our Global Interactive
        product line. We expect equipment revenue to increase as we continue to provide
        devices to new subscribers of our Wynd services and from our sales of equipment
        to subscribers on behalf of various wireless network providers.
  *Other
        revenue.* Other
        revenue decreased to $125,000 for the year ended December 31, 2005 from $260,000
        for the year ended December 31, 2004. This decrease was primarily due to
        reduced
        consulting services. We anticipate that consulting services will continue
        to
        decrease as a result of our decision not to pursue certain consulting projects
        and consulting services to third parties.
  *Cost
        of subscriber revenue.* Cost of
        subscriber revenue decreased to $967,000 for the year ended December 31,
        2005
        from $2.5 million for the year ended December 31, 2004. The decrease was
        primarily due to having a smaller average subscriber base in the year ended
        December 31, 2005 than in the year ended December 31, 2004. We expect the
        number
        of our subscribers to continue to decline due to additional deactivations
        in our
        Go.Web subscriber base.
 
 *Cost
        of prepaid services revenue.* We began
        marketing prepaid calling cards in late 2004 and incurred $3.6 million of
        costs
        related to prepaid service revenue for the year ended December 31, 2005 compared
        to $201,000 for the year ended December 31, 2004. We did not achieve positive
        gross margin on our prepaid services due to less than favorable carrier rates
        to
        international destinations. We expect cost of prepaid services revenue to
        approximate revenue for the reasonably foreseeable future.
  *Cost
        of equipment revenue.* Cost of
        equipment revenue increased to $585,000 for the year ended December 31, 2005
        from $260,000 for the year ended December 31, 2004. This increase was primarily
        due to higher sales of mobile devices as a result of our Global Interactive
        product line.  We
        expect
        cost of equipment revenue to increase as we continue to provide devices to
        new
        subscribers of our Wynd services and from the cost of equipment provided
        to
        subscribers on behalf of various wireless network providers.
  *Cost
        of network operations.* Cost
        of network operations decreased to $231,000 for the year ended December 31,
        2005
        from $733,000 for the year ended December 31, 2004 as a result of the
        consolidation of our GoWeb and WyndTell production systems into a single
        data
        center operated by a third party provider. We expect our cost of network
        operations to decline as a percentage of sales during 2006.
  37
  *Sales
        and marketing.* Sales
        and
        marketing expenses increased to $1.2 million for the year ended December
        31,
        2005 from $597,000 for the year ended December 31, 2004. This increase primarily
        was due to our introduction of new products and services to the consumer
        marketplace as well as increased payments to third parties as compensation
        for
        marketing these products. We expect sales and marketing expenses to increase
        as
        a percentage of sales during 2006 as compared to 2005 as we continue to
        introduce new products and services to the consumer marketplace.
  *General
        and administrative.* General
        and administrative expenses decreased to $5.3 million for the year ended
        December 31, 2005 from $5.6 million for the year ended December 31, 2004.
        This
        decrease primarily was due to our consolidation of operations completed during
        April of 2004. We expect general and administrative expenses to decline as
        a
        percentage of sales during 2006.
  *Research
        and development* .
        Research and development expense decreased to $363,000 for the year ended
        December 31, 2005 from $507,000 for the year ended December 31, 2004. This
        decrease primarily was due to decreased salaries and benefits for personnel
        performing research and development activities. We expect research and
        development expenses to remain constant as we utilize internal resources
        to
        develop and maintain our WyndTell and Relay technologies rather than using
        outside consultants.
 
 *Amortization
        of other intangibles.* Amortization
        of other intangibles decreased for the year ended December 31, 2005 to $639,000
        from $682,000 for the year ended December 31, 2004. Our intangible assets
        were
        fully amortized as of December 31, 2005.
  *Settlement
        Gains, net.* The
        Company entered into agreements with certain of its creditors to relieve
        the
        Company of certain debts. As a result, the Company has recorded settlement
        gains
        totaling $1.5 million in 2004.
  *Interest
        (expense) income, net.* Interest
        income increased to $160,000 for the year ended December 31, 2005 from interest
        expense of $1.0 million for the year ended December 31, 2004. This change
        was
        primarily due to the amortization of deferred debt expense and discount recorded
        on bridge notes payable during 2004.
  *Income
        tax benefit.* Income tax benefit, which consists of the sale of certain
        State net operating loss carryforwards, was $764,000 and $732,000 for the
        years
        ended December 31, 2005 and 2004, respectively.
  ***Wireless
        Data Solutions Segment***
 
  *Subscriber
        revenue.* Subscriber revenue decreased to $2.3 million for the year ended December
        31,
        2005 from $5.6 million for the year ended December 31, 2004. This decrease
        was
        primarily due to declines in our full service offering subscriber base, as
        well
        as, our Go.Web customers. This decline was partially offset by increased
        subscribers to our value added WyndPower service. Our subscriber base decreased
        to 22,718 subscribers at December 31, 2005 from 56,026 subscribers at December
        31, 2004. We expect the number of our subscribers to continue to decline
        due to
        additional deactivations in our Go.Web subscriber base. Our average monthly
        revenue per user, or ARPU, decreased to $4.97 for the year ended December
        31,
        2005 from $7.10 for the year ended December 31, 2004.
  38
  *Relay
        services revenue.* We
        began providing relay services in late March 2005 and recognized $1.3 million
        of
        relay service revenue for the year ended December 31, 2005. We did not provide
        relay services for the corresponding prior period.
  *Commission
        revenue.* We
        began earning commission during 2005 from our acquisition of subscribers
        on
        behalf of various wireless network providers and recognized $755,000 of
        commission revenue for the year ended December 31, 2005. We did not provide
        comparable services during 2004. We expect commission revenue to increase
        as we
        continue to acquire subscribers on behalf of various wireless network providers.
  *Equipment
        revenue.* Equipment revenue increased to $442,000 for the year ended December 31, 2005
        from $181,000 for the year ended December 31, 2004. This increase was primarily
        due to higher sales of mobile devices as a result of our Global Interactive
        product line. We expect equipment revenue to increase as we continue to provide
        devices to new subscribers of our Wynd services and from our sales of equipment
        to subscribers on behalf of various wireless network providers.
  *Other
        revenue.* Other
        revenue decreased to $125,000 for the year ended December 31, 2005 from $260,000
        for the year ended December 31, 2004. This decrease was primarily due to
        reduced
        consulting services. We anticipate that consulting services will continue
        to
        decrease as a result of our decision not to pursue certain consulting projects
        and consulting services to third parties.
  *Cost
        of subscriber revenue.* Cost of
        subscriber revenue decreased to $967,000 for the year ended December 31,
        2005
        from $2.5 million for the year ended December 31, 2004. The decrease was
        primarily due to having a smaller average subscriber base in the year ended
        December 31, 2005 than in the year ended December 31, 2004. We expect the
        number
        of our subscribers to continue to decline due to additional deactivations
        in our
        Go.Web subscriber base.
 
 *Cost
        of equipment revenue.* Cost of
        equipment revenue increased to $585,000 for the year ended December 31, 2005
        from $260,000 for the year ended December 31, 2004. This increase was primarily
        due to higher sales of mobile devices as a result of our Global Interactive
        product line.  We
        expect
        cost of equipment revenue to increase as we continue to provide devices to
        new
        subscribers of our Wynd services and from the cost of equipment provided
        to
        subscribers on behalf of various wireless network providers.
  *Cost
        of network operations.* Cost
        of network operations decreased to $168,000 for the year ended December 31,
        2005
        from $733,000 for the year ended December 31, 2004 as a result of the
        consolidation of our GoWeb and WyndTell production systems into a single
        data
        center operated by a third party provider. We expect our cost of network
        operations to decline as a percentage of sales during 2006.
  *Sales
        and marketing.* Sales
        and
        marketing expenses increased to $1.2 million for the year ended December
        31,
        2005 from $597,000 for the year ended December 31, 2004. This increase primarily
        was due to our introduction of new products and services to the consumer
        marketplace as well as increased payments to third parties as compensation
        for
        marketing these products. We expect sales and marketing expenses to increase
        as
        a percentage of sales during 2006 as compared to 2005 as we continue to
        introduce new products and services to the consumer marketplace.
  39
 
 *General
        and administrative.* General
        and administrative expenses decreased to $2.3 million for the year ended
        December 31, 2005 from $2.8 million for the year ended December 31, 2004.
        This
        decrease primarily was due to our consolidation of operations completed during
        April of 2004. We expect general and administrative expenses to decline as
        a
        percentage of sales during 2006.
  *Research
        and development* .
        Research and development expense decreased to $363,000 for the year ended
        December 31, 2005 from $507,000 for the year ended December 31, 2004. This
        decrease primarily was due to decreased salaries and benefits for personnel
        performing research and development activities. We expect research and
        development expenses to remain constant as we utilize internal resources
        to
        develop and maintain our WyndTell and Relay technologies rather than using
        outside consultants.
 
 *Amortization
        of other intangibles.* Amortization
        of other intangibles decreased for the year ended December 31, 2005 to $639,000
        from $682,000 for the year ended December 31, 2004. Our intangible assets
        were
        fully amortized as of December 31, 2005.
  *Settlement
        Gains, net.* The
        Company entered into agreements with certain of its creditors to relieve
        the
        Company of certain debts. As a result, the Company has recorded settlement
        gains
        totaling $1.5 million in 2004.
  *Interest
        (expense) income, net.* Interest
        income increased to $160,000 for the year ended December 31, 2005 from interest
        expense of $1.0 million for the year ended December 31, 2004. This change
        was
        primarily due to the amortization of deferred debt expense and discount recorded
        on bridge notes payable during 2004.
  ***Prepaid
        Services Segment***
  *Prepaid
        services revenue.* We
        began marketing prepaid calling cards in late 2004 and recognized $3.1 million
        of prepaid service revenue for the year ended December 31, 2005 compared
        to
        $193,000 for the year ended December 31, 2004.
  *Cost
        of prepaid services revenue.* We began
        marketing prepaid calling cards in late 2004 and incurred $3.6 million of
        costs
        related to prepaid services revenue for the year ended December 31, 2005
        compared to $201,000 for the year ended December 31, 2004. We did not achieve
        positive gross margin on our prepaid services due to less than favorable
        carrier
        rates to international destinations. We expect cost of prepaid services revenue
        to approximate revenue for the reasonably foreseeable future.
 
 *Cost
        of network operations.* Cost
        of network operations related to our prepaid calling cards was $63,000 for
        the
        year ended December 31, 2005.
  *General
        and administrative.* General
        and administrative expenses related to our prepaid calling cards was $481,000
        for the year ended December 31, 2005. We expect general and administrative
        expenses to decline as a percentage of sales during 2006.
  40
  ***Corporate
        Segment***
  *General
        and administrative.* General
        and administrative expenses decreased to $2.5 million for the year ended
        December 31, 2005 from $2.8 million for the year ended December 31, 2004.
        This
        decrease primarily was due to our consolidation of operations completed during
        April of 2004. We expect general and administrative expenses to decline as
        a
        percentage of sales during 2006.
  *Interest
        (expense) income, net.* Interest
        income increased to $160,000 for the year ended December 31, 2005 from interest
        expense of $1.0 million for the year ended December 31, 2004. This change
        was
        primarily due to the amortization of deferred debt expense and discount recorded
        on bridge notes payable during 2004.
  *Income
          tax benefit.* Income tax benefit, which consists of the sale of certain
          State net operating loss carryforwards, was $764,000 and $732,000 for the
          years
          ended December 31, 2005 and 2004, respectively.
  **Year
        Ended December 31, 2004 Compared to Year Ended December 31, 2003**
  *Subscriber
        revenue.* Subscriber revenue decreased to $5.6 million for the year ended December
        31,
        2004 from $10.1 million for the year ended December 31, 2003. This decrease
        was
        primarily due to declines in our full service offering subscriber base. Our
        subscriber base decreased to 56,026 subscribers at December 31, 2004 from
        75,130
        subscribers at December 31, 2003. Our average monthly revenue per user, or
        ARPU,
        decreased to $7.10 for the year ended December 31, 2004 from $10.10 for the
        year
        ended December 31, 2003.
  *Prepaid
        services revenue.* We
        began marketing prepaid calling cards in late 2004 and recognized $193,000
        of
        prepaid service revenue for the year ended December 31, 2004. We did not
        market
        prepaid calling cards during 2003.
  *Equipment
        revenue.* Equipment revenue decreased to $181,000 for the year ended December 31, 2004
        from $1.0 million for the year ended December 31, 2003. This decrease was
        primarily due to lower sales of mobile devices.
  *Other
        revenue.* Other
        revenue decreased to $260,000 for the year ended December 31, 2004 from $728,000
        for the year ended December 31, 2003. This decrease was primarily due to
        reduced
        consulting services.
  *Cost
        of subscriber revenue.* Cost of
        subscriber revenue decreased to $2.5 million for the year ended December
        31,
        2004 from $2.7 million for the year ended December 31, 2003. The decrease
        was
        primarily due to having a smaller average subscriber base in the year ended
        December 31, 2004 than in the year ended December 31, 2003. Additionally,
        during
        the third and fourth quarters of 2003, we recorded one-time reductions of
        accruals for certain subscriber-related costs recorded in prior periods of
        $763,000 and $750,000, respectively.
 
 *Cost
        of equipment revenue.* Cost of
        equipment revenue decreased to $260,000 for the year ended December 31, 2004
        from $1.2 million for the year ended December 31, 2003. This decrease was
        primarily due to lower sales of mobile devices and was partially offset by
        an
        inventory related charge for a lower of cost to market adjustment primarily
        related to wireless handheld devices which remained unsold.
  41
  *Cost
        of network operations.* Cost
        of network operations decreased to $733,000 for the year ended December 31,
        2004
        from $1.8 million for the year ended December 31, 2003 as a result of the
        consolidation of our GoWeb and WyndTell production systems into a single
        data
        center operated by a third party provider.
  *Cost
        of prepaid services revenue.* We
        began marketing prepaid calling cards in late 2004 and incurred $201,000
        of
        costs related to prepaid service revenue for the year ended December 31,
        2004.
        We did not market prepaid calling cards during 2003.
  *Sales
        and marketing.* Sales
        and
        marketing expenses decreased to $597,000 for the year ended December 31,
        2004
        from $1.1 million for the year ended December 31, 2003. This decrease primarily
        was due to our consolidation of operations completed during April of 2004,
        as
        well as decreased advertising and marketing activities. Additionally, during
        the
        year ended December 31, 2003, we recorded a $372,000 one-time reduction of
        accruals for certain sales and marketing expenses recorded in prior
        periods.
  *General
        and administrative.* General
        and administrative expenses decreased to $5.6 million for the year ended
        December 31, 2004 from $9.6 million for the year ended December 31, 2003.
        This
        decrease primarily was due to our consolidation of operations completed during
        April of 2004, as well as decreased general corporate activities of
        approximately 500,000, decreased salaries and benefits for personnel performing
        general corporate activities of approximately $1.0 million, amounts paid
        to
        third parties for professional services of approximately $100,000, a decrease
        in
        our bad debt expense of approximately $295,000, and decreased facility costs
        of
        approximately $2.0 million. Additionally, during the fourth quarter of 2003,
        we
        recorded one-time reductions of deferred rent for certain long term lease
        related costs recorded in prior periods of $347,000.
  *Research
        and development* .
        Research and development expense decreased to $507,000 for the year ended
        December 31, 2004 from $1.2 million for the year ended December 31, 2003.
        This
        decrease primarily was due to decreased salaries and benefits for personnel
        performing research and development activities.
 
 *Amortization
        of other intangibles.* Amortization
        of other intangibles decreased for the year ended December 31, 2004 to $682,000
        from $1.1 million for the year ended December 31, 2003.  This
        decrease primarily was due to certain of our other intangibles being fully
        amortized as of December 31, 2003.
  *Settlement
        Gains, net.* The
        Company entered into agreements with certain of its creditors to relieve
        the
        Company of certain debts. As a result, the Company has recorded settlement
        gains
        totaling $1.5 million in 2004 and $85,000 in 2003.
  *Interest
        (expense) income, net.* The
        Company incurred interest expense of $944,000 for the year ended December
        31,
        2004 compared to interest expense of $275,000 for the year ended December
        31,
        2003. This change was primarily due to the amortization of deferred debt
        expense
        and discount recorded on bridge notes payable. The majority of this amortization
        occurred in 2004.
  *Income
          tax benefit.* Income tax benefit, which consists of the sale of certain
          State net operating loss carryforwards, was $732,000 and $284,000 for the
          years
          ended December 31, 2004 and 2003, respectively.
  42
  **Liquidity
        and Capital Resources**
  Since
        our
        inception, we financed our operations through private placements of our equity
        securities.
  We
        have
        incurred significant operating losses since our inception and as of December
        31,
        2005 had an accumulated deficit of $273.2 million. During 2005, we incurred
        a
        net loss of $4.4 million and used $1.7 million of cash to fund operating
        activities. As of December 31, 2005 we had $4.8 million in cash and cash
        equivalents. We anticipate continuing to generate revenues from four primary
        sources, (i) recurring service revenue; (ii) relay service revenue; (iii)
        activation bounties; and (iv) prepaid calling card services. This will be
        partially offset by increases in sales and marketing and research and
        development expenditures from levels incurred during 2005 as we introduce
        new
        products and services to the consumer marketplace. We currently anticipate
        that
        our available cash resources will be sufficient to fund our operating needs
        for
        at least the next 12 months. At this time, we do not have any bank credit
        facility or other working capital credit line under which we may borrow funds
        for working capital or other general corporate purposes.
 
 On
        December 19, 2003, we entered into definitive agreements with multiple investors
        providing for the investors to purchase approximately 1.3 million shares
        of our
        common stock, par value $.01 (the "Common Stock"), for an aggregate purchase
        price of $14.5 million in a private placement offering (the "Financing").
        As
        part of this Financing, on December 19, 2003, we received net proceeds of
        approximately $800,000 from the issuance of 10% Senior Secured Convertible
        Promissory Notes (the "Notes") and certain warrants. The Notes were purchased
        by
        the investors at their par value in proportional amounts to their aggregate
        investment commitments in the Financing. Upon stockholder approval and closing
        of the Financing, the Notes and all accrued interest automatically converted
        into Common Stock at a price of $12.00 per share, subject to certain
        adjustments. We closed on the balance of the Financing in March 2004. We
        issued
        a total of 1.3 million shares which included 86,509 of shares related to
        the conversion of the Notes. We received net proceeds after expenses of
        approximately $12 million.
  Net
        cash
        used in operating activities was $1.7 million, $5.5 million and $7.9 million
        for
        the years ended December 31, 2005, 2004 and 2003, respectively. The principal
        use of cash in each of these periods was to fund our losses from
        operations.
  On
        May 2,
        2005, the Company entered into a short term loan agreement with Hands On
        Video
        Relay Services, Inc., a Delaware corporation, and Hands On Sign Language
        Services, Inc., a California corporation (collectively, "Hands On”). Pursuant to
        that agreement, all amounts that the Company advanced to Hands On are secured,
        initially, by the assets acquired with such funds and bear interest at a
        defined
        prime rate. If Hands On breaches any material provision of any definitive
        agreement, the balance of principal and accrued interest will become immediately
        due and payable and Hands On will grant the Company a broader security interest
        in substantially all of Hands On's assets until amounts due under the loan
        agreement are paid. As of December 31, 2005, the Company had advanced
        approximately $520,000, excluding interest, to Hands On under the loan
        agreement. As a result of the termination of the merger agreement (see
“Business-Termination of Hands On Merger Agreement”), repayment obligations will
        begin June 1, 2006 and are scheduled to continue through February
        2008.
  43
 
 Net
        cash
        (used in)/provided by investing activities was ($553,000), ($621,000) and
        $2.6
        million for the years ended December 31, 2005, 2004 and 2003, respectively.
        For
        the year ended December 31, 2005, we used cash in investment activities
        principally as loans to Hands On and expenses related to the proposed merger
        with Hands On; the merger agreement was terminated during March 2006. For
        the
        year ended December 31, 2004, we used cash in investment activities principally
        to support
        a letter of credit in favor of Cingular, as well as purchases
        of property, equipment and leasehold improvements. For the year ended December
        31, 2003, we provided cash by release of funds previously restricted and
        through
        the sale of subscribers to Earthlink. These amounts were partially offset
        from
        the purchases of property, equipment and leasehold improvements as well as
        an
        acquisition of subscribers for our Wynd subsidiary. During 2006, we expect
        to
        use cash in investing activities principally through capital
        expenditures.
  Net
        cash
        (used in)/provided by financing activities was ($62,000), $12.7 million and
        $914,000 for the years ended December 31, 2005, 2004 and 2003, respectively.
        For
        2005, this resulted primarily from payments made on lease obligations and
        was
        partially offset by the issuance of Common Stock. For 2004 and 2003, this
        primarily resulted from the above-mentioned financing and the issuance of
        Common
        Stock from the exercise of stock options and warrants.
  As
        of
        December 31, 2005, our principal commitments consisted of obligations
        outstanding under operating leases. As of December 31, 2005, future minimum
        payments for non-cancelable operating leases having terms in excess of one
        year
        amounted to $426,000, of which $286,000 is payable in 2006.
  The
        following table summarizes our contractual obligations at December 31, 2005,
        and
        the effect such obligations are expected to have on our liquidity and cash
        flow
        in future periods.
  December
                  31, (In thousands)
              
              Total
              
              Less
                  than
                1
                  Year
              
              1-3
                Years
              
              4-5
                Years
              
              After
                  5
                YearsContractual
                  Obligations:Capital
                  LeaseObligations
              
              $
              54
              
              $
              31
              
              $
              23
              
              $
              --
              
              $
              --Operating
                  LeaseObligations
              
              
              426
              
              
              286
              
              
              140
              
              
              --
              
              
              --Total
                  Contractual CashObligations
              
              $
              480
              
              $
              317
              
              $
              163
              
              $
              --
              
              $
              --
  We
        have
        employment agreements with certain of our key executives, which provide for
        fixed compensation. Our maximum aggregate cash liability under the agreements,
        if we terminated these employees, is approximately $695,000 at December 31,
        2005.
  44
  As
        of
        December 31, 2005, we had net operating loss carryforwards of approximately
        $179.4 million for federal income tax purposes that will expire through 2022.
        The State tax benefit during 2005 of $764,000 is attributable to our sale
        of
        certain state net operating loss carryforwards. For financial reporting
        purposes, a valuation allowance has been recognized to offset the deferred
        tax
        assets related to these carryforwards. Due to limitations imposed by the
        Tax
        Reform Act of 1986, and as a result of a significant change in our ownership
        in
        1999, the utilization of net operating loss carryforwards that arose prior
        to
        such ownership change is subject to an annual limitation of $1.4 million.
        In
        addition, we acquired additional operating losses through our acquisitions
        in
        2000 of Wynd and Hotpaper. We believe that an ownership change has occurred
        with
        respect to these entities. The effect of an ownership change would be the
        imposition of an annual limitation on the use of net operating loss
        carryforwards attributable to periods before such change. We have not performed
        a detailed analysis to determine the amount of the potential limitations.
        In
        addition, we have not performed a detailed analysis to determine the amount
        of
        the potential limitations as a result of the 2004 Financing.
  **Recent
        Accounting Pronouncements**
  In
        November 2004, the Financial Accounting Standards Board ("FASB") issued
        Statement of Financial Accounting Standards ("SFAS") 151, "Inventory Costs
        - An Amendment of ARB No. 43, Chapter 4" ("SFAS 151"). SFAS 151 amends the
        guidance in ARB No. 43, Chapter 4 to clarify the accounting for abnormal
        amounts
        of idle facility expense, freight, handling costs, and wasted material
        (spoilage). The provisions of SFAS 151 are effective for inventory costs
        incurred during fiscal years beginning after June 15, 2005. The adoption
        of SFAS
        151 is not expected to have a material effect on our financial condition
        or
        results of operations.
  In
        December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary Assets
        - an
        amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153 amends APB Opinion
        29 to
        eliminate the similar productive asset exception and establishes that exchanges
        of productive assets should be accounted for at fair value, rather than at
        carryover basis unless (1) neither the asset received nor the asset surrendered
        has a fair value that is determinable within reasonable limits, (2) the
        transaction is an exchange transaction to facilitate sales to customers,
        or (3)
        the transaction lacks commercial substance. A nonmonetary exchange has
        commercial substance if the future cash flows of the entity are expected
        to
        change significantly as a result of the exchange. The provisions of SFAS
        153 are
        effective for nonmonetary exchanges occurring in fiscal periods beginning
        after
        June 15, 2005. The adoption of SFAS 153 is not expected to have a material
        effect on our financial condition or results of operations.
  In
        December 2004, the FASB issued SFAS 123R, "Share-Based Payment" ("SFAS 123R").
        SFAS 123R establishes that employee services received in exchange for
        share-based payment result in a cost that should be recognized in the income
        statement as an expense when the services are consumed by the enterprise.
        It
        further establishes that those expenses be measured at fair value determined
        as
        of the grant date. The provisions of SFAS 123R become effective as of the
        beginning of the first annual reporting period that begins after June 15,
        2005.
        Furthermore, the Office of the Chief Accountant ("OCA") of the Securities
        and
        Exchange Commission issued Staff Accounting Bulletin 107 to provide
        clarification of the OCA’s interpretation SFAS 123R as it applies to share based
        compensation arrangements for both employees and non employees. We have
        evaluated the effect of the adoption of SFAS 123R and have concluded that
        its
        adoption will not have a material affect on our financial condition and results
        of operations.
  45
  In
        March
        2005, the FASB issued Interpretation No. 47, Accounting
        for Conditional Asset Retirement Obligations ("FIN
        47"). FIN 47 clarifies that conditional obligations meet the definition of
        an
        asset retirement obligation in SFAS No. 143, Accounting
        for Asset Retirement Obligations ,
        and
        therefore should be recognized if their fair value is reasonably estimable.
        The
        adoption of FIN 47 did not have a material effect on our financial condition
        or
        results of operations.
  In
        February 2006, the FASB issued FASB 155, “Accounting for Certain Hybrid
        Financial Instruments” - an amendment of FASB Statements No. 133 and 140, to
        simplify and make more consistent the accounting for certain financial
        instruments. Specifically, SFAS No. 155 amends SFAS No. 133, Accounting for
        Derivative Instruments and Hedging Activities, to permit fair value
        re-measurement for any hybrid financial instrument with an embedded derivative
        that otherwise would require bifurcation, provided that the whole instrument
        is
        accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140,
        Accounting for the Impairment or Disposal of Long-Lived Assets, to allow
        a
        qualifying special-purpose entity (SPE) to hold a derivative financial
        instrument that pertains to a beneficial interest other than another derivative
        financial instrument. SFAS No. 155 applies to all financial instruments acquires
        or issued after the beginning of an entity’s first fiscal year that begins after
        September 15, 2006, with earlier application allowed. The adoption of FASB
        155
        is not expected to have a material effect on our financial condition or results
        of operations.
  The
        FASB
        has issued SFAS No. 156, “Accounting for Servicing of Financial Assets” ("SFAS
        156"), to simplify accounting for separately recognized servicing assets
        and
        servicing liabilities. SFAS No. 156 amends SFAS No. 140, “Accounting for
        Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities.”
        Additionally, SFAS No. 156 permits, but does not require, an entity to choose
        either the amortization method or the fair value measurement method for
        measuring each class of separately recognized servicing assets and servicing
        liabilities. SFAS No. 156 applies to all separately recognized servicing
        assets
        and servicing liabilities acquired or issued after the beginning of an entity’s
        fiscal year that begins after September 15, 2006, although early adoption
        is
        permitted. We believe that this SFAS will have no effect on our financial
        condition or results of operations.
  46
  **Item
            7A.** **Quantitative
            and Qualitative Disclosures About Market Risk.**
  We
        believe that we have limited exposure to financial market risks, including
        changes in interest rates. At December 31, 2005, all of our available excess
        funds were cash or cash equivalents. The value of our cash and cash equivalents
        is not materially affected by changes in interest rates. A hypothetical change
        in interest rates of 1.0% would result in an annual change in net loss of
        approximately $50,000 based on cash and cash equivalent balances at December
        31,
        2005. We currently hold no derivative instruments and do not earn foreign-source
        income.
  **Item
            8.** **Financial
            Statements and Supplementary Data.**
  The
        financial statements and the notes thereto which contain supplementary data
        required to be filed pursuant to this Item 8 are appended to this Annual
        Report
        on Form 10-K. A list of the financial statements filed herewith is found
        at
        "Item 15. Exhibits and Financial Statement Schedules".
  **Item
            9.** **Changes
            in and Disagreements with Accountants on Accounting and Financial
            Disclosure.**
   Not
        applicable.
  **Item
            9A.** **Controls
            and Procedures.**
  Disclosure
        controls and procedures .
        As of
        the end of the Company's most recently completed fiscal quarter (the
        registrant's fourth fiscal quarter in the case of an annual report) covered
        by
        this report, the Company carried out an evaluation, with the participation
        of
        the Company's management, including the Company's Chief Executive Officer
        and
        Chief Financial Officer, of the effectiveness of the Company's disclosure
        controls and procedures pursuant to Securities Exchange Act Rule 13a-15.
        Based
        upon that evaluation, the Company's Chief Executive Officer and Chief Financial
        officer concluded that the Company's disclosure controls and procedures are
        effective in ensuring that information required to be disclosed by the Company
        in the reports that it files or submits under the Securities Exchange Act
        is
        recorded, processed, summarized and reported within the time periods specified
        in the SEC's rules and forms.
 
 Changes
        in internal controls over financial reporting .
        There
        have been no changes in the Company's internal controls over financial reporting
        that occurred during the Company's last fiscal quarter to which this report
        relates that have materially affected, or are reasonably likely to materially
        affect, the Company's internal control over financial reporting.
 
 **Item
            9B.** **Other
            Information**
  None
  47
  **PART
        III**
  **Item
            10.** **Directors.**
  We
        maintain a code of ethics applicable to our principal executive officer,
        principal financial officer, principal accounting officer or controller,
        and to
        persons performing similar functions. A copy of this code of ethics is posted
        on
        our Web site accessible at http://www.goamerica.com/Company_info/ethics_execs.php .
        We
        intend to post any amendment to, or waiver from, any provision in our code
        of ethics that applies to such officers on our website.
  We
        will
        provide information that is responsive to this Item 10 in our definitive
        proxy
        statement or in an amendment to this Annual Report not later than 120 days
        after
        the end of the fiscal year covered by this Annual Report, in either case
        under
        the caption “Directors and Executive Officers”, and possibly elsewhere therein.
        That information is incorporated in this Item 10 by reference.
  **Item
            11.** **Executive
            Compensation.**
  We
        will
        provide information that is responsive to this Item 11 regarding compensation
        paid to our executive officers in our definitive proxy statement or in an
        amendment to this Annual Report not later than 120 days after the end of
        the
        fiscal year covered by this Annual Report, in either case under the caption
        “Executive Compensation”, and possibly elsewhere therein. That information is
        incorporated in this Item 11 by reference.
  **Item
            12.** **Security
            Ownership of Certain Beneficial Owners and Management and Related Stockholder
            Matters.**
  We
        will
        provide information that is responsive to this Item 12 regarding ownership
        of
        our securities by some beneficial owners and our directors and executive
        officers in our definitive proxy statement or in an amendment to this Annual
        Report not later than 120 days after the end of the fiscal year covered by
        this
        Annual Report, in either case under the caption “Security Ownership of Certain
        Beneficial Owners and Management”, and possibly elsewhere therein. That
        information is incorporated in this Item 12 by reference.
  **Item
            13.** **Certain
            Relationships and Related Transactions** **.**
  We
        will
        provide information that is responsive to this Item 13 regarding transactions
        with related parties in our definitive proxy statement or in an amendment
        to
        this Annual Report not later than 120 days after the end of the fiscal year
        covered by this Annual Report, in either case under the caption “Certain
        Relationships and Related Transactions”, and possibly elsewhere therein. That
        information is incorporated in this Item 13 by reference.
  48
  **Item
            14.** **Principal
            Accountant Fees and Services.**
  We
        will
        provide information that is responsive to this Item 14 regarding accounting
        fees
        and services in our definitive proxy statement or in an amendment to this
        Annual
        Report not later than 120 days after the end of the fiscal year covered by
        this
        Annual Report, in either case under the caption “Principal Accountant Fees and
        Services” or “Accounting Matters”, and possibly elsewhere therein. That
        information is incorporated in this Item 14 by reference.
  **PART
        IV**
  **Item
        15. Exhibits and
        Financial Statement Schedules.**
  The
        following documents are filed as part of this report:
 (a)   (1)  
        Consolidated Financial Statements and (2) Consolidated Financial Statement
        Schedule
  Reference
        is made to the Index to Consolidated Financial Statements and Financial
        Statement Schedule on Page F-1.
  All
        other
        schedules have been omitted because the required information is not present
        or
        is not present in amounts sufficient to require submission of the schedule,
        or
        because the information required is included in the Consolidated Financial
        Statements or Notes thereto.
  (b)
              Exhibits.
  Reference
        is made to the Exhibit Index on Page 51.
  49
  **SIGNATURES**
  Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange
        Act of 1934, the Registrant has duly caused this report to be signed on its
        behalf by the undersigned, thereunto duly authorized this 30th day of March,
        2006.
  GOAMERICA,
                INC.By:
              /s/ Daniel
                R.
                LuisDaniel
                R. Luis,Chief
                Executive Officer
 
 Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been signed below by the following persons on behalf of the Registrant and
        in
        the capacities and on the dates indicated.
  **Signature**
              
              **Title**
              
              **Date**/s/
                  Aaron Dobrinsky
              
              Chairman
                  of the Board
              
              March
                  30, 2006Aaron
                  Dobrinsky/s/
                  Daniel R. Luis
              
              Chief
                  Executive Officer
              
              March
                  30, 2006Daniel
                  R. Luis
              
              (Principal
                  Executive Officer)/s/
                  Donald G. Barnhart
              
              Chief
                  Financial Officer
              
              March
                  30, 2006Donald
                  G. Barnhart
              
              (Principal
                Accounting
                Officer)/s/
                  Joseph Korb
              
              Director
              
              March
                  30, 2006Joseph
                  Korb/s/
                  Alan Docter
              
              Director
              
              March
                  30, 2006Alan
                Docter/s/
                  Mark Kristoff
              
              Director
              
              March
                  30, 2006Mark
                  Kristoff/s/
                  King Lee
              
              Director
              
              March
                  30, 2006King
                  Lee/s/
                  David Lyons
              
              Director
              
              March
                  30, 2006David
                  Lyons
  50
  EXHIBIT
        INDEX **‡**
 ITEM
        15(b)
  **Exhibit
                  No.**
              **Description
                  of Exhibit**2.1
              Agreement
                  and Plan of Reorganization, dated July 6, 2005, by and among GoAmerica,
                  Inc., HOVRS Acquisition Corporation, HOSLS Acquisition, Hands On
                  Video
                  Relay Services, Inc., Hands On Sign Language Services, Inc., Ronald
                  E.
                  Obray, as Hands On shareholders’ agent, and Denise E. Obray (incorporated
                  by reference to GoAmerica’s Current Report on Form 8-K filed with the
                  Securities and Exchange Commission on July 6, 2005) (File No. 000-29359),
                  as amended by Waiver and Supplemental Agreement, dated as of October
                  28,
                  2005, among Hands On Video Relay Services, Inc., Hands On Sign
                  Language
                  Services, Inc. Denise and Ronald Obray, and GoAmerica, Inc. (incorporated
                  by reference to GoAmerica’s Quarterly Report on Form 10-Q filed with the
                  Securities and Exchange Commission on November 14, 2005) (File
                  No.
                  000-29359)3.1
              Restated
                  Certificate of Incorporation, as filed with the Secretary of State
                  of the
                  State of Delaware on August 18, 2005 (Incorporated by reference
                  to
                  GoAmerica's Quarterly Report on Form 10-Q filed with the Securities
                  and
                  Exchange Commission on November 14, 2005) (File No.
                  000-29359)3.2
              By-laws
                  (Incorporated by reference to GoAmerica's Registration Statement
                  on Form
                  S-1 [which became effective on April 6, 2000]). (File No.
                  333-94801)4.1
              Warrant
                  Certificate, dated as of November 14, 2003, issued to Stellar Continental
                  LLC (Incorporated by reference to GoAmerica’s Current Report on Form 8-K
                  filed with the Securities and Exchange Commission on November 24,
                  2003)
                  (File No. 000-29359)4.2
              Warrant
                  to Purchase Common Stock of GoAmerica, Inc., issued to Derek Caldwell
                  as
                  nominee for Sunrise Securities Corp. (Incorporated by reference
                  to
                  GoAmerica’s Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on December 24, 2003) (File No.
                  000-29359)4.3
              Warrant
                  to Purchase Common Stock of GoAmerica, Inc., issued to Amnon Mandelbaum
                  as
                  nominee for Sunrise Securities Corp. (Incorporated by reference
                  to
                  GoAmerica’s Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on December 24, 2003) (File No.
                  000-29359)10.1
              Form
                  of Invention Assignment and Non-Disclosure Agreement by and between
                  GoAmerica and its employees (Incorporated by reference to GoAmerica's
                  Registration Statement on Form S-1 [which became effective on April
                  6,
                  2000]) (File No. 333-94801)10.2
              Form
                  of Indemnification Agreement by and between GoAmerica and each
                  of its
                  directors and executive officers (Incorporated by reference to
                  GoAmerica's
                  Registration Statement on Form S-1 [which became effective on April
                  6,
                  2000]) (File No. 333-94801)10.3
              Amended
                  and Restated Employment Agreement by and between GoAmerica, Inc.
                  and
                  Daniel R. Luis, dated as of November 8, 2005 (Incorporated by reference
                  to
                  GoAmerica’s Quarterly Report on Form 10-Q filed with the Securities and
                  Exchange Commission on November 14, 2005) (File No.
                  000-29359)10.4
              Employment
                  Agreement by and between GoAmerica and Aaron Dobrinsky, dated as
                  of May 6,
                  2002 (Incorporated by reference to GoAmerica’s Quarterly Report on Form
                  10-Q filed with the Securities and Exchange Commission on August
                  2, 2002)
                  (File No. 000-29359), as amended by Amendment No. 1, dated as of
                  March 10,
                  2004 (Incorporated by reference to GoAmerica’s Annual Report on Form 10-K
                  filed with the Securities and Exchange Commission on March 10,
                  2004) (File
                  No. 000-29359)
  51
  **Exhibit
                  No.**
              **Description
                  of Exhibit**10.5
              Amended
                  and Restated Employment Agreement by and between GoAmerica and
                  Jesse Odom,
                  dated as of November 8, 2005 (Incorporated by reference to GoAmerica’s
                  Quarterly Report on Form 10-Q filed with the Securities and Exchange
                  Commission on November 14, 2005) (File No. 000-29359)10.6
              Amended
                  and Restated Employment Agreement by and between GoAmerica and
                  Donald G.
                  Barnhart, dated as of November 8, 2005 (Incorporated by reference
                  to
                  GoAmerica’s Quarterly Report on Form 10-Q filed with the Securities and
                  Exchange Commission on November 14, 2005) (File No.
                  000-29359)10.7
              Employment
                  Agreement by and between GoAmerica and Wayne D. Smith, dated as
                  of
                  November 8, 2005 (Incorporated by reference to GoAmerica’s Quarterly
                  Report on Form 10-Q filed with the Securities and Exchange Commission
                  on
                  November 14, 2005) (File No. 000-29359)10.8
              Services
                  Agreement by and between GoAmerica and David Lyons, dated as of
                  March 1,
                  2005 (Incorporated by reference to GoAmerica’s Annual Report on Form 10-K
                  filed with the Securities and Exchange Commission on March 31,
                  2005) (File
                  No. 000-29359)10.9
              GoAmerica
                  Communications Corp. 1999 Stock Option Plan (Incorporated by reference
                  to
                  GoAmerica's Registration Statement on Form S-1 [which became effective
                  on
                  April 6, 2000]) (File No. 333-94801)10.10
              GoAmerica,
                  Inc. 1999 Stock Plan (Incorporated by reference to GoAmerica's
                  Registration Statement on Form S-1 [which became effective on April
                  6,
                  2000]) (File No. 333-94801)10.11
              GoAmerica,
                  Inc. Employee Stock Purchase Plan (Incorporated by reference to
                  GoAmerica's Registration Statement on Form S-1 [which became effective
                  on
                  April 6, 2000]) (File No. 333-94801)10.12
              GoAmerica,
                  Inc. 2005 Equity Compensation Plan (Incorporated by reference to
                  Annex B
                  of GoAmerica, Inc.'s Proxy Statement dated November 15, 2005) (File
                  No.
                  333-94801)10.13
              Lease
                  Agreement dated as of August 1, 2004, by and between GoAmerica
                  Communications Corp. and Stellar Continental LLC (Incorporated
                  by
                  reference to GoAmerica's Annual Report on Form 10-K filed with
                  the
                  Securities and Exchange Commission on March 31, 2005) (File No.
                  000-29359), as amended by Amendment No. 1, dated as of August 1,
                  2004
                  (Incorporated by reference to GoAmerica's Annual Report on Form
                  10-K filed
                  with the Securities and Exchange Commission on March 31, 2005)
                  (File No.
                  000-29359).10.14
              Purchase
                  Agreement, dated as of December 19, 2003, by and between GoAmerica,
                  Inc.
                  and the Investors set forth therein (Incorporated by reference
                  to
                  GoAmerica’s Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on December 24, 2003) (File No.
                  000-29359)10.15
              Registration
                  Rights Agreement, dated as of December 19, 2003, by and between
                  GoAmerica,
                  Inc. and the Investors set forth therein (Incorporated by reference
                  to
                  GoAmerica’s Current Report on Form 8-K filed with the Securities and
                  Exchange Commission on December 24, 2003) (File No.
                  000-29359)10.16
              Short
                  Term Loan Agreement between Hands On Video Relay Services, Inc.
                  and Hands
                  On Sign Language Services, Inc., and GoAmerica, Inc., entered into
                  on May
                  2, 2005 (Incorporated by reference to GoAmerica's Quarterly Report
                  on Form
                  10-Q filed on May 12, 2005) (File No. 000-29359)21.1
              List
                  of subsidiaries of GoAmerica, Inc. (filed herewith)23.1
              Consent
                  of WithumSmith+Brown, P.C. (filed herewith)31.1
              Certification
                  pursuant to Rule 13a-14(a) or 15d-14(a) (filed
                  herewith)
  52
  **Exhibit
                  No.**
              **Description
                  of Exhibit**31.2
              Certification
                  pursuant to Rule 13a-14(a) or 15d-14(a) (filed
                  herewith)32.1
              Certification
                  pursuant to 18 U.S.C. Section 1350 (filed herewith)32.2
              Certification
                  pursuant to 18 U.S.C. Section 1350 (filed
                  herewith)
 
 **‡**
              Certain
                  schedules and exhibits to the documents listed in this index are
                  not being
                  filed herewith or have not been previously filed because we believe
                  that
                  the information contained therein is not material. Upon request
                  therefor,
                  we agree to furnish supplementally a copy of any schedule or exhibit
                  to
                  the Securities and Exchange
                  Commission.
  53
  **GOAMERICA,
        INC.**
  **INDEX
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **AND
        FINANCIAL STATEMENT SCHEDULE**
  **Page**Report
                  of Independent Registered Public Accounting Firm
              F-2Consolidated
                  Balance Sheets as of December 31, 2005 and 2004
              F-3Consolidated
                  Statements of Operations for the years ended December 31,
                  2005,
                2004
                  and 2003
              F-4Consolidated
                  Statements of Stockholders' Equity for the years ended December 31,
                  2005, 2004 and 2003
              F-5Consolidated
                  Statements of Cash Flows for the years ended December 31, 2005,
                  2004 and
                  2003
              F-6Notes
                  to Consolidated Financial Statements
              F-7Financial
                  Statement Schedule:
                Valuation
                  and Qualifying Accounts and Reserves for the years endedDecember
                  31, 2005, 2004 and 2003.
              F-34
 
 All
        other
        schedules have been omitted because the required information is not present
        or
        is not present in amounts sufficient to require submission of the schedule,
        or
        because the information required is included in the Consolidated Financial
        Statements or Notes thereto.
  F-1
  **Report
        of Independent Registered Public Accounting Firm**
  The
        Board
        of Directors,
 GoAmerica,
        Inc.
  We
        have
        audited the accompanying consolidated balance sheets of GoAmerica, Inc. as
        of
        December 31, 2005 and 2004, and the related consolidated statements of
        operations, stockholders’ equity and cash flows for the years ended December 31,
        2005, 2004 and 2003. Our audits also included the consolidated financial
        statement schedule for the years ended December 31, 2005, 2004 and 2003 as
        listed in the index at Item 15(a). These financial statements are the
        responsibility of the Company’s management. Our responsibility is to express an
        opinion on these financial statements based on our audits.
  We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
  In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the consolidated financial position of GoAmerica, Inc.
        as of
        December 31, 2005 and 2004, and the consolidated results of their operations
        and
        their cash flows for the years ended December 31, 2005, 2004 and 2003 in
        conformity with accounting principles generally accepted in the United States
        of
        America. Also, in our opinion, such consolidated financial statement schedule
        referred to above, when considered in relation to the basic financial statements
        taken as a whole, presents fairly, in all material respects, the information
        set
        forth therein.
  
  /s/
        WithumSmith + Brown, P.C.
 
 
 New
        Brunswick, New Jersey
 March
        20,
        2006
  F-2
  **GOAMERICA,
        INC.**
 **CONSOLIDATED
        BALANCE SHEETS**
  **(In
        thousands, except share and per share data)**
 
 **December
                  31,****Assets**
              
              **2005**
              
              **2004**Current
                  assets:Cash
                  and cash equivalents
              
              $
              4,804
              
              $
              7,098Accounts
                  receivable, less allowance for doubtful accounts of $278 in 2005
                  and $603
                  in 2004
              
              
              1,154
              
              
              1,530Other
                  receivables
              
              
              --
              
              
              732Merchandise
                  inventories, net
              
              
              161
              
              
              123Prepaid
                  expenses and other current assets
              
              
              135
              
              
              219Total
                  current assets
              
              
              6,254
              
              
              9,702Restricted
                  cash
              
              
              300
              
              
              604Property,
                  equipment and leasehold improvements, net
              
              
              677
              
              
              940Trade
                  names, net of accumulated amortization of $4,572 in 2005and
                  $4,388 in 2004
              
              
              --
              
              
              184Other
                  intangible assets, net of accumulated amortization of $7,210in
                  2005 and $6,755 in 2004
              
              
              --
              
              
              455Goodwill,
                  net
              
              
              6,000
              
              
              6,000Other
                  assets
              
              
              844
              
              
              101Total
                  assets
              
              $
              14,075
              
              $
              17,986**Liabilities
                  and Stockholders' Equity**Currentliabilities:Accounts
                  payable
              
              $
              765
              
              $
              348Accrued
                  expenses
              
              
              676
              
              
              538Deferred
                  revenue
              
              
              92
              
              
              285Other
                  current liabilities
              
              
              19
              
              
              1Total
                  current liabilities
              
              
              1,552
              
              
              1,172Other
                  long term liabilities
              
              
              25
              
              
              --Commitments
                  and contingenciesStockholders'
                  equity:Preferred
                  stock, $.01 par value; authorized: 4,351,943 in 2005and
                  2004; issued and outstanding: none in 2005 and 2004
              
              
              --
              
              
              --Common
                  stock, $.01 par value; authorized: 200,000,000 in 2005and
                  2004; issued : 2,362,514 in 2005 and 2,117,339 in 2004,
                  respectively
              
              
              24
              
              
              21Additional
                  paid-in capital
              
              
              287,137
              
              
              285,854Deferred
                  employee compensation
              
              
              (1,230
              )
              
              --Accumulated
                  deficit
              
              
              (273,247
              )
              
              (268,875
              )Treasury
                  stock, at cost, 24,063 shares in 2005 and 2004
              
              
              (186
              )
              
              (186
              )Total
                  stockholders' equity
              
              
              12,498
              
              
              16,814Total
                  liabilities and stockholders' equity
              
              $
              14,075
              
              $
              17,986
  **See
        accompanying notes.**
  F-3
  **GOAMERICA,
        INC.**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
  **(In
        thousands, except share and per share data)**
  **Years
                  ended December 31,****2005**
              
              **2004**
              
              **2003****Revenues:**Subscriber
              
              $
              2,348
              
              $
              5,588
              
              $
              10,108Prepaid
                  services
              
              
              3,147
              
              
              193
              
              
              --Relay
                  services
              
              
              1,261
              
              
              --
              
              
              --Commissions
              
              
              755
              
              
              --
              
              
              --Equipment
              
              
              442
              
              
              181
              
              
              1,042Other
              
              
              125
              
              
              260
              
              
              7288,078
              
              
              6,222
              
              
              11,878**Costs
                  and expenses:**Cost
                  of subscriber revenue
              
              
              967
              
              
              2,539
              
              
              2,669Cost
                  of equipment revenue
              
              
              585
              
              
              260
              
              
              1,152Cost
                  of network operations
              
              
              231
              
              
              733
              
              
              1,828Cost
                  of prepaid services
              
              
              3,617
              
              
              201
              
              
              --Sales
                  and marketing
              
              
              1,167
              
              
              597
              
              
              1,072General
                  and administrative
              
              
              5,320
              
              
              5,625
              
              
              9,617Research
                  and development
              
              
              363
              
              
              507
              
              
              1,209Depreciation
                  and amortization of fixed assets
              
              
              485
              
              
              804
              
              
              1,912Amortization
                  of other intangibles
              
              
              639
              
              
              682
              
              
              1,081Impairment
                  of goodwill
              
              
              --
              
              
              --
              
              
              193Impairment
                  of other long-lived assets
              
              
              --
              
              
              --
              
              
              1,20213,374
              
              
              11,948
              
              
              21,935Loss
                  from operations
              
              
              (5,296
              )
              
              (5,726
              )
              
              (10,057
              )**Other
                  income (expense):**Gain
                  on sale of subscribers
              
              
              --
              
              
              --
              
              
              1,756Settlement
                  gains, net
              
              
              --
              
              
              1,494
              
              
              85Interest
                  (expense) income, net
              
              
              160
              
              
              (944
              )
              
              (275
              )160
              
              
              550
              
              
              1,566Net
                  loss before benefit from income taxes
              
              
              (5,136
              )
              
              (5,176
              )
              
              (8,491
              )Income
                  tax benefit
              
              
              764
              
              
              732
              
              
              284Net
                  loss
              
              $
              (4,372
              )
              $
              (4,444
              )
              $
              (8,207
              )Basic
                  net loss per share
              
              $
              (2.05
              )
              $
              (2.49
              )
              $
              (12.10
              )Diluted
                  net loss per share
              
              $
              (2.05
              )
              $
              (2.49
              )
              $
              (12.10
              )Weighted
                  average shares used in computation of basic net loss per
                  share
              
              
              2,128,977
              
              
              1,785,403
              
              
              678,240Weighted
                  average shares used in computation of diluted net loss per
                  share
              
              
              2,128,977
              
              
              1,785,403
              
              
              678,240
  **See
        accompanying notes.**
  F-4
  **GOAMERICA,
        INC.**
 **CONSOLIDATED
        STATEMENTS OF STOCKHOLDERS' EQUITY**
  **(In
        thousands, except share data)**
 
 **Common
                  Stock**
              
              
              
              
              
              
              
              
              
              
              
              **Treasury
                  Stock****Number**
                **of
                  shares**
              
              
              **Amount**
              
              
              **Additional**
                **paid-in**
                **capital**
              
              
              **Deferred**
                **employee**
                **compensation**
              
              
              **Accumulated**
                **deficit**
              
              
              **Number**
                **of
                  shares**
              
              
              **Amount**
              
              
              **Total**
                **stock-**
                **holders'**
                **equity****Balance
                  at January 1, 2003**
              
              
              675,207
              
              $
              7
              
              $
              269,548
              
              $
              (314
              )
              $
              (256,224
              )
              
              --
              
              $
              --
              
              $
              13,017Issuance
                  of common stock pursuant to:exercise
                  of employee stock options
              
              
              8,931
              
              
              --
              
              
              258
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              258employee
                  stock purchase plan
              
              
              601
              
              
              --
              
              
              13
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              13Issuance
                  of warrant to settle lease commitment
              
              
              --
              
              
              --
              
              
              440
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              440Issuance
                  of warrant to placement agent to secure bridge note
                  financing
              
              
              --
              
              
              --
              
              
              292
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              292Fair
                  value of warrants issued to investors as part of bridge note
                  financing
              
              
              --
              
              
              --
              
              
              487
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              487Value
                  of beneficial conversion feature of convertible bridge note
                  financing
              
              
              --
              
              
              --
              
              
              528
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              528Amortization
                  of deferred employee compensation
              
              
              --
              
              
              --
              
              
              --
              
              
              314
              
              
              
              
              
              --
              
              
              --
              
              
              314Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              (8,207
              )
              
              --
              
              
              --
              
              
              (8,207
              )**Balance
                  at December 31, 2003**
              
              
              684,739
              
              
              7
              
              
              271,566
              
              
              --
              
              
              (264,431
              )
              
              --
              
              
              --
              
              
              7,142Issuance
                  of common stock pursuant to:exercise
                  of employee stock options
              
              
              6,776
              
              
              --
              
              
              173
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              173exercise
                  of warrants
              
              
              50,652
              
              
              --
              
              
              13
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              13equity
                  financing, net of expenses
              
              
              1,224,304
              
              
              12
              
              
              12,197
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              12,209conversion
                  of bridge note payable
              
              
              86,509
              
              
              1
              
              
              1,014
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,015acquisition
                  of intangible assets
              
              
              54,671
              
              
              1
              
              
              441
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              442Issuance
                  of common stock pursuant to settlement agreements
              
              
              9,688
              
              
              --
              
              
              450
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              450Purchase
                  of treasury stock
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              24,063
              
              
              (186
              )
              
              (186
              )Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              (4,444
              )
              
              --
              
              
              --
              
              
              (4,444
              )**Balance
                  at December 31, 2004**
              
              
              2,117,339
              
              
              21
              
              
              285,854
              
              
              --
              
              
              (268,875
              )
              
              24,063
              
              
              (186
              )
              
              16,814Issuance
                  of common stock pursuant to exercise of warrants
              
              
              175
              
              
              --
              
              
              2
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              2Issuance
                  of restricted stock pursuant to employment contracts
              
              
              245,000
              
              
              3
              
              
              1,281
              
              
              (1,284
              )
              
              --
              
              
              --
              
              
              --
              
              
              --Amortization
                  of deferred employee compensation
              
              
              --
              
              
              --
              
              
              --
              
              
              54
              
              
              --
              
              
              --
              
              
              --
              
              
              54Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              --
              
              
              (4,372
              )
              
              --
              
              
              --
              
              
              (4,372
              )**Balance
                  at December 31, 2005**
              
              
              2,362,514
              
              $
              24
              
              $
              287,137
              
              $
              (1,230
              )
              $
              (273,247
              )
              
              24,063
              
              $
              (186
              )
              $
              12,498
  **See
        accompanying notes.**
  F-5
  **GOAMERICA,
        INC.**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
  **(In
        thousands)**
  **Years
                  ended December 31,****2005**
              
              **2004**
              
              **2003****Operating
                  activities**Net
                  loss
              
              $
              (4,372
              )
              $
              (4,444
              )
              $
              (8,207
              )Adjustments
                  to reconcile net loss to net cash usedin
                  operating activities:Depreciation
                  and amortization
              
              
              1,124
              
              
              1,486
              
              
              2,993Amortization
                  of debt discount and deferred financing costs
              
              
              --
              
              
              1,014
              
              
              248Impairment
                  of goodwill
              
              
              --
              
              
              --
              
              
              193Impairment
                  of other long-lived assets
              
              
              --
              
              
              --
              
              
              1,202Provision
                  for losses on accounts receivable
              
              
              318
              
              
              239
              
              
              534Common
                  stock issued for interest expense
              
              
              --
              
              
              19
              
              
              --Settlement
                  gains, net
              
              
              --
              
              
              (1,494
              )
              
              --Accrued
                  loss on sublease
              
              
              --
              
              
              --
              
              
              509Gain
                  on sale of subscribers
              
              
              --
              
              
              --
              
              
              (1,756
              )Non-cash
                  employee compensation
              
              
              54
              
              
              --
              
              
              314Non-cash
                  warrant expense
              
              
              --
              
              
              --
              
              
              440Other
                  non-cash charges
              
              
              --
              
              
              --
              
              
              7Changes
                  in operating assets and liabilities:(Increase)
                  decrease in accounts receivable
              
              
              58
              
              
              (32
              )
              
              3,509(Increase)
                  decrease in other receivables
              
              
              732
              
              
              (198
              )
              
              (534
              )(Increase)
                  decrease in inventory
              
              
              (38
              )
              
              90
              
              
              833(Increase)
                  decrease in prepaid expenses and other current assets
              
              
              84
              
              
              (104
              )
              
              405Increase
                  (decrease) in accounts payable
              
              
              417
              
              
              (1,124
              )
              
              (3,374
              )Increase
                  (decrease) in accrued expenses
              
              
              137
              
              
              (564
              )
              
              (3,496
              )Decrease
                  in deferred revenue
              
              
              (193
              )
              
              (388
              )
              
              (1,733
              )Net
                  cash used in operating activities
              
              
              (1,679
              )
              
              (5,500
              )
              
              (7,913
              )**Investing
                  activities**Purchase
                  of property, equipment and leasehold improvements
              
              
              (114
              )
              
              (138
              )
              
              (35
              )Proceeds
                  from the sale of subscribers
              
              
              --
              
              
              --
              
              
              1,756Acquisition
                  of subscribers
              
              
              --
              
              
              --
              
              
              (368
              )Acquisition
                  of intangible assets
              
              
              --
              
              
              (75
              )
              
              --Change
                  in other assets and restricted cash
              
              
              (439
              )
              
              (408
              )
              
              1,232Net
                  cash provided by (used in) investing activities
              
              
              (553
              )
              
              (621
              )
              
              2,585**Financing
                  activities**Issuance
                  of common stock, net of related expenses
              
              
              2
              
              
              12,981
              
              
              271Issuance
                  of note payable and warrant, net of financing costs
              
              
              --
              
              
              --
              
              
              800Payments
                  made for deferred financing costs
              
              
              --
              
              
              (139
              )
              
              (112
              )Purchase
                  of treasury stock
              
              
              --
              
              
              (186
              )
              
              --Payments
                  made on capital lease obligations
              
              
              (64
              )
              
              (5
              )
              
              (45
              )Net
                  cash provided by (used in) financing activities
              
              
              (62
              )
              
              12,651
              
              
              914Increase
                  (decrease) in cash and cash equivalents
              
              
              (2,294
              )
              
              6,530
              
              
              (4,414
              )Cash
                  and cash equivalents at beginning of year
              
              
              7,098
              
              
              568
              
              
              4,982Cash
                  and cash equivalents at end of year
              
              $
              4,804
              
              $
              7,098
              
              $
              568
  **See
        accompanying notes** .
  F-6
  **GOAMERICA,
        INC.**
  **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
        thousands, except share and per share data)**
  **1.**
              **Description
                  of Business and Basis of
                  Presentation**
  GoAmerica®
        is a communications service provider, offering wireless data solutions primarily
        for consumers who are deaf, hard of hearing and/or speech-impaired and
        telecommunication services in the form of prepaid calling cards. We currently
        develop, market and support most wireless data solutions through Wynd
        Communications Corporation, a wholly owned subsidiary of GoAmerica. Wynd
        Communications offers enhanced services known as WyndTell® and WyndPowerTM, which
        assist our
        deaf or hard of hearing customers in communicating from most major metropolitan
        areas in the continental United States and parts of Canada. WyndTell and
        WyndPower allow customers to send and receive email messages to and from
        any
        email service, provide for delivery and acknowledgements of sent messages
        that
        are read, send and receive TTY/TDD (text telephone or teletypewriter) messages,
        faxes, and text-to-speech messages, and access the Internet using such wireless
        computing devices as Research in Motion, or RIM, wireless handheld devices,
        certain Motorola paging devices and the T-Mobile Sidekick, Fido hiptop, and
        SunCom hiptop devices running on Danger Inc.'s hiptop platform. In addition
        to
        WyndTell, in the later part of March 2005, the Company began deriving relay
        service revenues from a wireless Internet Relay service marketed in conjunction
        with Sprint Corporation and our i711.comTM branded
        Internet service as a standard feature across all of the WyndTell service
        offerings that operate on certain RIM handheld devices and the T-Mobile
        Sidekick. Our i711.com wireless relay service permits deaf consumers to contact
        a Telecommunications Relay Service, or “TRS”, operator to place a “live”
telephone call to a hearing party by using certain wireless handheld devices.
        Additionally, GoAmerica continues to support customers who use our proprietary
        software technology called Go.WebTM. The
        Wynd
        Communications and Go.Web services transmit over most major wireless data
        networks in North America. The Company also records revenues from commissions
        received through the acquisition of subscribers on behalf of various network
        providers with which the Company does not have reseller agreements.
  The
        Company’s prepaid segment offers prepaid calling card services to distributors
        and resellers for nationwide distribution.
  The
        Company operates in a highly competitive environment subject to rapid
        technological change and the emergence of new technology. Although management
        believes its services are transferable to emerging technologies, rapid changes
        in technology could have an adverse financial impact on the Company. The
        Company
        is highly dependent on third parties for wireless communication devices and
        wireless netwok connectivity.
  The
        Company has incurred significant operating losses since its inception and,
        as of
        December 31, 2005, had an accumulated deficit of $273,247. During 2005, the
        Company incurred a net loss of $4,372 and used $1,679 of cash to fund operating
        activities. As of December 31, 2005 the Company had $4,804 in cash and cash
        equivalents.
  F-7
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **2.**
              **Significant
                  Accounting Policies**
  *Basis
        of Consolidation*
  The
        consolidated financial statements include the accounts of GoAmerica, Inc.
        and
        its wholly-owned subsidiaries. All significant intercompany balances and
        transactions have been eliminated in consolidation.
  *Cash
        Equivalents*
  Cash
        equivalents consist of highly liquid investments with an original maturity
        of
        three months or less when purchased.
  *Use
        of Estimates*
  The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities
        and
        the disclosure of contingent assets and liabilities at the date of the financial
        statements, and the reported amounts of certain revenues and expenses during
        the
        reporting periods. Actual results could differ from those estimates. Significant
        estimates that affect the financial statements include, but are not limited
        to:
        collectibility of accounts receivable, amortization periods and recoverability
        of long-lived assets.
  *Receivables
        and Credit Policies*
  Accounts
        receivable are uncollateralized customer obligations due under normal trade
        terms requiring payment within 30 days from the invoice date. Accounts
        receivable are stated at the amount billed to the customer. Interest is not
        billed or accrued. Accounts receivable in excess of 90 days old are considered
        delinquent. Payments of accounts receivable are allocated to the specific
        invoices identified on the customer’s remittance advice or, if unspecified, are
        applied to the oldest unpaid invoices.
  The
        carrying amount of accounts receivable is reduced by a valuation allowance
        that
        reflects the Company’s best estimate of the amounts that may not be collected.
        This estimate is based on reviews of all balances in excess of 90 days from
        the
        invoice date and based on an assessment of current creditworthiness, estimating
        the portion, if any, of the balance that will not be collected. The Company
        reviews its valuation allowance on a quarterly basis.
  *Merchandise
        Inventories*
  Merchandise
        inventories, principally wireless devices, are stated at the lower of cost
        (first-in, first-out) basis or market. Inventories are recorded net of a
        reserve
        for excess and obsolete merchandise.
  F-8
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
   *Property,
        Equipment and Leasehold Improvements*
  Property,
        equipment and leasehold improvements are stated at cost. Depreciation is
        provided on the straight-line method over the estimated useful lives of the
        related assets ranging from two to seven years. Leasehold improvements are
        depreciated over the lesser of their useful lives or term of the lease.
        Expenditures for maintenance and repairs are charged to expense as
        incurred.
  *Computer
        Software Developed or Obtained For Internal Use*
  All
        direct internal and external costs incurred in connection with the development
        stage of software for internal use are capitalized. All other costs associated
        with internal use software are expensed when incurred. Amounts capitalized
        are
        included in property, equipment and leasehold improvements and are amortized
        on
        a straight-line basis over three years beginning when such assets are placed
        in
        service.
  *Goodwill
        and Intangible Assets*
  Goodwill
        and intangible assets result primarily from acquisitions accounted for under
        the
        purchase method. In accordance with Statement of Financial Accounting Standards
        (“SFAS”) No. 142, “Goodwill and Other Intangible Assets” (“SFAS
        No. 142”), goodwill and intangible assets with indefinite lives are not
        amortized but are subject to impairment by applying a fair value based test.
        Intangible assets with finite useful lives related to developed technology,
        customer lists, trade names and other intangibles are being amortized on
        a
        straight-line basis over the estimated useful life of the related asset,
        generally one to five years.
  *Recoverability*  *of
        Intangible and Other Long Lived Assets*
  In
        accordance with SFAS No.142, the Company reviews the carrying value of goodwill
        and intangible assets with indefinite lives annually or in certain circumstances
        as required. The Company measures impairment losses by comparing carrying
        value
        to fair value. Fair value is determined using discounted cash flow methodology.
  In
        accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
        Long-Lived Assets,” long-lived assets used in operations are reviewed for
        impairment whenever events or changes in circumstances indicate that carrying
        amounts may not be recoverable. For long-lived assets to be held and used,
        the
        Company recognizes an impairment loss only if its carrying amount is not
        recoverable through its undiscounted cash flows and measures the impairment
        loss
        based on the difference between the carrying amount and fair value.
  F-9
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  *Revenue
        Recognition*
  The
        Company derives subscriber revenue from the provision of wireless communication
        services. Subscriber revenue consists of monthly charges for access and usage
        and is recognized as the service is provided. Equipment revenue is recognized
        upon shipment and transfer of title to the end user. Revenue from relay services
        is recognized as revenue when services are provided or earned, primarily
        from a
        third party administrator. Revenue from commissions is recognized upon
        activation of subscribers on behalf of third party wireless network providers.
        Revenue from sale of prepaid calling cards is deferred upon sale of the cards.
        These deferred revenues are recognized as earned when usage of the cards
        occurs
        and/or administrative fees are imposed.
  *Cost
        of Revenues*
  Cost
        of
        subscriber revenue consists principally of airtime costs charged by carriers.
        Cost of equipment revenue consists of the cost of equipment sold. Cost of
        prepaid services consists principally of usage costs charged by
        carriers.
  *Income
        Taxes*
  Deferred
        income taxes are determined using the asset and liability method. Under this
        method, deferred tax assets and liabilities are determined based on differences
        between financial reporting and tax bases of assets and liabilities and are
        measured using the enacted tax rates and laws that will be in effect when
        the
        differences are expected to reverse. A valuation allowance is recorded when
        the
        expected recognition of a deferred tax asset is considered to be
        unlikely.
  *Advertising
        Costs*
  Advertising
        costs are expensed as incurred. During 2005, 2004 and 2003, advertising expense
        was approximately $110, $17 and $23, respectively.
  *Research
        and Development Costs*
  Research
        and development costs are expensed as incurred.
  F-10
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  *Stock-Based
        Employee Compensation*
  The
        Company accounts for employee stock-based compensation in accordance with
        Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
        to Employees", using an intrinsic value approach to measure compensation
        expense, if any. Under this method, compensation expense is recorded on the
        date
        of the grant only if the current market price of the underlying stock exceeds
        the exercise price. Options issued to non-employees are accounted for in
        accordance with SFAS 123, "Accounting for Stock-Based Compensation", and
        Emerging Issues Task Force ("EITF") Issue No. 96-18, "Accounting for Equity
        Instruments That Are Issued to Other Than Employees for Acquiring, or in
        Conjunction with Selling, Goods and Services", using a fair value
        approach.
  SFAS
        No. 123 established accounting and disclosure requirements using a fair
        value-basis method of accounting for stock-based employee compensation plans.
        As
        allowed by SFAS No. 123, the Company has elected to continue to apply the
        intrinsic value-based method of accounting described above, and has adopted
        the
        disclosure requirements of SFAS No. 123. Had the Company elected to
        recognize compensation cost based on fair value of the stock options at the
        date
        of grant under SFAS 123, such costs would have been recognized ratably over
        the vesting period of the underlying instruments and the Company's net loss
        and
        net loss per common share would have increased to the pro forma amounts
        indicated in the table below.
 
 Year
                  ended December 31,2005
              
              2004
              
              2003Net
                  loss
              
              $
              (4,372
              )
              $
              (4,444
              )
              $
              (8,207
              )Deduct:
                  Stock-based employee compensation expense included in reported
                  net
                  loss
              
              
              54
              
              
              --
              
              
              314Add:
                  Total stock-based employee compensation expense determined under
                  fair
                  value based method for all awards
              
              
              (569
              )
              
              (3,048
              )
              
              (3,968
              )Pro
                  forma net loss
              
              $
              (4,887
              )
              $
              (7,492
              )
              $
              (11,861
              )Loss
                  per share - basic, as reported
              
              $
              (2.05
              )
              $
              (2.49
              )
              $
              (12.10
              )Loss
                  per share - diluted, as reported
              
              $
              (2.05
              )
              $
              (2.49
              )
              $
              (12.10
              )Pro
                  forma loss per share - basic
              
              $
              (2.30
              )
              $
              (4.20
              )
              $
              (17.49
              )Pro
                  forma loss per share - diluted
              
              $
              (2.30
              )
              $
              (4.20
              )
              $
              (17.49
              )
  The
        pro
        forma results above are not intended to be indicative of or a projection
        of
        future results. Refer to Note 15 for assumptions used in computing the fair
        value amounts above.
  F-11
 **GOAMERICA,
            INC.**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
            thousands, except share and per share data)**
  Earnings
        (Loss) Per share
  The
        Company computes net loss per share under the provisions of SFAS No. 128,
        "Earnings per Share" (SFAS 128), and SEC Staff Accounting Bulletin No. 98
        (SAB
        98).
  Under
        the
        provisions of SFAS 128 and SAB 98, basic loss per share is computed by dividing
        the Company’s net loss for the period by the weighted-average number of shares
        of common stock outstanding during the period. Diluted net loss per share
        excludes potential common shares if the effect is antidilutive. Diluted loss
        per
        share is determined in the same manner as basic loss per share except that
        the
        number of shares is increased assuming exercise of dilutive stock options
        and
        warrants using the treasury stock method. As the Company had a net loss,
        the
        impact of the assumed exercise of the stock options and warrants is
        anti-dilutive and as such, these amounts have been excluded from the calculation
        of diluted loss per share. For the years ended December 31, 2005, 2004 and
        2003,
        a total of 181,428, 174,725 and 123,615 of common stock equivalent shares
        were
        excluded from the computation of diluted net loss per share.
  *Concentration
        of Credit Risk*
  Financial
        instruments that potentially subject the Company to a concentration of credit
        risk consist of cash and cash equivalents and accounts receivable. The Company
        maintains a significant portion of its cash and cash equivalents with two
        financial institutions. At times these balances exceed the FDIC insured limit.
  As
        of
        December 31, 2005 and 2004, the Company had 8% and 16%, respectively, of
        its
        accounts receivable with Earthlink. For the years ended December 31, 2005
        and
        2004, the Company generated 6% and 14% of its total revenue from Earthlink.
        As
        of December 31, 2005, the Company had 18% of its accounts receivable with
        T-Mobile. For the years ended December 31, 2005, the Company generated 9%
        of its
        total revenue with T-Mobile. There is no such T-Mobile concentration in 2004.
        The Company performs periodic credit evaluations of its customers but generally
        does not require collateral.
  *Fair
        Value of Financial Instruments*
  The
        carrying amounts of the Company's financial instruments, which include cash
        and
        cash equivalents, accounts receivable, accounts payable and accrued expenses
        approximate their fair values due to the short maturity of these
        items.
  *Reclassifications*
  The
        Company has reclassified certain prior year information to conform with current
        year presentation. Such reclassifications had no effect on the prior year’s net
        loss.
  F-12
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
 *Recent
        Accounting Pronouncements*
 
 In
        November 2004, the Financial Accounting Standards Board ("FASB") issued
        Statement of Financial Accounting Standards 151, "Inventory Costs - An
        Amendment of ARB No. 43, Chapter 4" ("SFAS 151"). SFAS 151 amends the guidance
        in ARB No. 43, Chapter 4 to clarify the accounting for abnormal amounts of
        idle
        facility expense, freight, handling costs, and wasted material (spoilage).
        The
        provisions of SFAS 151 are effective for inventory costs incurred during
        fiscal
        years beginning after June 15, 2005. The adoption of SFAS 151 is not expected
        to
        have a material effect on the Company's financial condition or results of
        operations.
  In
        December 2004, the FASB issued SFAS 153, "Exchanges of Nonmonetary Assets
        - an
        amendment of APB Opinion No. 29" ("SFAS 153"). SFAS 153 amends APB Opinion
        29 to
        eliminate the similar productive asset exception and establishes that exchanges
        of productive assets should be accounted for at fair value, rather than at
        carryover basis unless (1) neither the asset received nor the asset surrendered
        has a fair value that is determinable within reasonable limits, (2) the
        transaction is an exchange transaction to facilitate sales to customers,
        or (3)
        the transaction lacks commercial substance. A nonmonetary exchange has
        commercial substance if the future cash flows of the entity are expected
        to
        change significantly as a result of the exchange. The provisions of SFAS
        153 are
        effective for nonmonetary exchanges occurring in fiscal periods beginning
        after
        June 15, 2005. The adoption of SFAS 153 is not expected to have a material
        effect on the Company's financial condition or results of
        operations.
  In
        December 2004, the FASB issued SFAS 123R, "Share-Based Payment". SFAS 123R
        establishes that employee services received in exchange for share-based payment
        result in a cost that should be recognized in the income statement as an
        expense
        when the services are consumed by the enterprise. It further establishes
        that
        those expenses be measured at fair value determined as of the grant date.
        The
        provisions of SFAS 123R become effective as of the beginning of the first
        annual
        reporting period that begins after June 15, 2005. Furthermore, the Office
        of the
        Chief Accountant (OCA) of the Securities and Exchange Commission issued Staff
        Accounting Bulletin 107 to provide clarification of the OCA’s interpretation
        SFAS 123R as it applies to share based compensation arrangements for both
        employees and non employees. The Company has evaluated the effect of the
        adoption of SFAS 123R and has concluded that its adoption will not have a
        material affect on the Company's financial condition and results of
        operations.
  In
        March
        2005, the FASB issued Interpretation No. 47, Accounting
        for Conditional Asset Retirement Obligations ("FIN
        47"). FIN 47 clarifies that conditional obligations meet the definition of
        an
        asset retirement obligation in Statement of Financial Accounting Standards
        143, Accounting
        for Asset Retirement Obligations ("SFAS
        143"), and therefore should be recognized if their fair value is reasonably
        estimable. The adoption of FIN 47 did not have a material effect on the
        Company's financial condition or results of operations.
  F-13
 **GOAMERICA,
            INC.**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
            thousands, except share and per share data)**
 In
        February 2006, the FASB issued FASB 155, “Accounting for Certain Hybrid
        Financial Instruments” - an amendment of FASB Statements No. 133 and 140, to
        simplify and make more consistent the accounting for certain financial
        instruments. Specifically, SFAS No. 155 amends SFAS No. 133, Accounting for
        Derivative Instruments and Hedging Activities, to permit fair value
        re-measurement for any hybrid financial instrument with an embedded derivative
        that otherwise would require bifurcation, provided that the whole instrument
        is
        accounted for an a fair value basis. SFAS No. 155 amends SFAS No. 140,
        Accounting for the Impairment or Disposal of Long-Lived Assets, to allow
        a
        qualifying special-purpose entity (SPE) to hold a derivative financial
        instrument that pertains to a beneficial interest other than another derivative
        financial instrument. SFAS No. 155 applies to all financial instruments acquired
        or issued after the beginning of an entity’s first fiscal year that begins after
        September 15, 2006, with earlier application allowed. The adoption of FASB
        155
        is not expected to have a material effect on the Company's financial condition
        or results of operations.
  The
        FASB
        has issued SFAS No. 156, “Accounting for Servicing of Financial Assets”, to
        simplify accounting for separately recognized servicing assets and servicing
        liabilities. SFAS No. 156 amends SFAS No. 140, “Accounting for Transfers and
        Servicing of Financial Assets and Extinguishments of Liabilities. Additionally,
        SFAS No. 156 permits, but does not require, an entity to choose either the
        amortization method or the fair value measurement method for measuring each
        class of separately recognized servicing assets and servicing liabilities.
        SFAS
        No. 156 applies to all separately recognized servicing assets and servicing
        liabilities acquired of issued after the beginning of an entity’s fiscal year
        that begins after September 15, 2006, although early adoption is permitted.
        The
        Company believes that this SFAS will have no effect on the Company’s financial
        condition or results of operations.
  **3.**
              **Lease
                  Settlement**
  On
        January 10, 2003, the Company entered into a sublease agreement to partially
        offset the cost of unused office space at 401 Hackensack Avenue. The sublease
        agreement was set to expire in April 2007. As a result of this agreement,
        the
        Company recorded a loss on sublease of $610 in 2003.
  The
        Company entered into two agreements, each dated as of November 14, 2003,
        with
        Stellar Continental LLC (“Stellar”), the lessor of the Company’s corporate
        headquarters at 433 Hackensack Avenue and its office at 401 Hackensack Avenue,
        both located in Hackensack, New Jersey (collectively, the “Hackensack Offices”).
        The agreements consist of a Surrender Agreement and a new Lease Agreement
        as
        well as a Warrant Certificate (collectively, the “Long Term Lease
        Settlement”).
  F-14
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  The
        Long
        Term Lease Settlement enabled the Company to cure all prior defaults under
        the
        previous lease (the “Original Lease”, as described below) and terminated all
        parties’ rights and obligations under the Original Lease, in exchange for (i)
        Stellar’s right to retain $556 previously drawn on the Company’s letter of
        credit that secured the Original Lease, (ii) the Company’s issuance of a warrant
        to Stellar that allows Stellar to acquire up to 12,500 shares of the Company’s
        Common Stock at an exercise price of $36.80 per share at any time prior to
        November 14, 2008 and (iii) the execution of a new short term lease between
        the
        Company and Stellar for office space at 433 Hackensack Avenue (see note 11).
        The
        Long Term Lease Settlement also requires the Company to rent from Stellar
        any
        new office space in the Hackensack, New Jersey area that it may require over
        the
        term of the new lease, on terms no less favorable than the New Lease. The
        sublease agreement described above was effectively cancelled by these
        settlements. Therefore, the Company reversed the remaining $509 of unamortized
        loss on sublease as of December 31, 2003.
  The
        warrant to purchase 12,500 shares of the Company's common stock at a price
        of
        $36.80 per share was immediately exercisable at the date of grant and expires
        five years thereafter. The warrant had an estimated fair market value at
        the
        date of grant of approximately $440, as determined by using the Black-Scholes
        method and was recognized by the Company during the fourth quarter of 2003
        as an
        offset to the reversal of the loss on sublease described above. Both items
        are
        included in settlement gains, net in the accompanying 2003 statement of
        operations. Such warrant remains outstanding as of December 31,
        2005.
  **4.**
              **Settlement
                  Gains and Changes in
                  Estimates**
  **Settlement
        Gains, net**
  In
        December 2003, the Company entered into an agreement with a creditor to settle
        an obligation for less than the recorded amount by making a final cash payment
        to this vendor prior to December 31, 2003. The Company recorded a gain on
        settlement of approximately $64 relating to this transaction and has included
        this item in settlement gains, net in the accompanying 2003 statement of
        operations.
  In
        December 2003, the Company executed a series of settlement agreements with
        various vendors that provided, upon their consummation, for the reduction
        of
        amounts owed by the Company to these vendors. Generally, the terms of the
        settlement agreements called for the Company to make fixed cash payments
        or
        issue shares of the Company's common stock. The consummation of the settlement
        agreements was contingent upon the Company's complying with all of the terms
        of
        the individual agreements, certain of which are as follows:
  ·
              Cash
                  payments of approximately $300 to vendors with which the Company
                  had
                  established settlement agreements.
  F-15
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
 ·
              Establishment
                  of a standby letter of credit in favor of Cingular, which resulted
                  in
                  restricted cash in the original amount of
                  $600.
  All
        such
        terms and conditions were satisfied in 2004 and, as a result, the Company
        recorded approximately $1,621 in additional settlement gains during the year
        ended December 31, 2004. In addition, approximately $450 of vendor liabilities
        were satisfied through the issuance of 9,688 shares of the Company's common
        stock.
  On
        December 23, 2003, the Company executed a settlement agreement with Eastern
        Computer Exchange, Inc. ("Eastern Computer") with respect to certain payment
        obligations pursuant to two equipment leases (the "Leases") by agreeing to
        pay
        Eastern Computer $350 upon closing the financing discussed in Note 5 in exchange
        for a full release of the Company and its affiliates of the claim filed by
        Eastern Computer. Previously, Eastern Computer had taken back the equipment
        covered under the Leases. This settlement enabled the Company to cure all
        prior
        defaults under the Leases. The Company recorded a loss on this settlement
        of $7,
        which is included in settlement gains, net in the accompanying 2003 statement
        of
        operations.
  **Changes
        in Estimates**
  During
        the year ended December 31, 2003, the Company reviewed certain liability
        provisions and accrued expenses based on recent discussions with vendors
        and
        recorded the following adjustments:
  ·
              A
                  $347 reduction of general and administrative expenses relating
                  to the
                  elimination of an accrued liability for deferred rent on the Company’s
                  lease obligations at 401 and 433 Hackensack Avenue (see note
                  3).
  ·
              A
                  $1,513 reduction of accruals for certain subscriber related costs
                  based
                  upon a finalization of amounts owed to
                  vendors.
  ·
              A
                  $372 reduction of accruals for certain sales and marketing costs
                  recorded
                  in prior periods.
  The
        above
        amounts were recorded as changes in estimates and reductions of the related
        expenses in the accompanying 2003 statement of operations.
  F-16
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **5.**
              **Bridge
                  Note Payable and Equity
                  Financing**
  On
        December 19, 2003, the Company entered into definitive agreements with multiple
        investors providing for the investors to purchase approximately 1.3 million
        shares of the Company's Common Stock, par value $.01 (the "Common Stock"),
        for
        an aggregate purchase price of $14,500 in a private placement offering (the
        "Financing"). As part of this Financing, on December 19, 2003, the Company
        received net proceeds of approximately $800 from the issuance of 10% Senior
        Secured Convertible Promissory Notes (the "Notes") and certain warrants.
        The
        Notes were purchased by the investors at their par value in proportional
        amounts
        to their aggregate investment commitments in the Financing. Upon stockholder
        approval and closing of the Financing, the Notes and all accrued interest
        automatically converted into Common Stock at a price of $12.00 per share,
        subject to certain adjustments.
  The
        notes
        contained a beneficial conversion feature, which had been calculated in the
        amount of approximately $528. This amount was amortized as interest expense
        through March 2004 when it was converted to equity.
  In
        addition to the Notes, the Company granted to the investors warrants to purchase
        16,916 shares of the Company's common stock at a price of $12.00 per share.
        These warrants were immediately exercisable at the date of grant and expire
        in
        five years. The warrants had an estimated fair market value at the date of
        grant
        of approximately $487, as determined using the Black-Scholes method, which
        discount was amortized as interest expense over the life of the debt. The
        Note
        Payable is shown on the Balance Sheet at December 31, 2003 net of unamortized
        discount in the amount of $390. As of December 31, 2005, 14,101 of these
        warrants remain outstanding.
  On
        March
        10, 2004, the Company’s stockholders at a special meeting of the stockholders
        approved the following:
 ·
              Approved
                  the issuance of 1,224,304 shares of the Company’s common stock in exchange
                  for cash consideration of $12,209, net of expenses.
 ·
              Authorized
                  the Board of Directors to amend the Company’s restated certificate of
                  incorporation to effect a reverse stock split at one of five different
                  ratios.
 ·
              Authorized
                  the Board of Directors to amend the Company’s restated certificate of
                  incorporation to increase the number of shares of common stock
                  the Company
                  is authorized to issue from 200,000,000 to 350,000,000 shares,
                  resulting
                  in an increase in the total number of authorized shares of capital
                  stock
                  from 204,351,943 to 354,351,943. The Board of Directors did not
                  act on
                  this approval to increase the Company’s authorized
                  shares.
  F-17
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  As
        a
        result, the Company issued a total of 1,310,813 shares of its common stock,
        comprised of the 1,224,304 shares referred to above and 86,509 shares upon
        the
        mandatory conversion of the Bridge Notes Payable and related accrued interest.
        The Company received net proceeds of approximately $12,000  after
        deducting the $714 cash payment made to the offering placement agent and
        deferred offering expenses such as professional fees.
 
 **6.**
              **Segment
                  Information.**
  The
        Company has two reportable business segments: Wireless Data Solutions and
        Prepaid Services. The operating results of these business segments are
        distinguishable and regularly reviewed by the Company’s executive officers. The
        Company evaluates the performance of its business segments based primarily
        on
        operating income (loss). All overhead is allocated to the business segments,
        except for certain specific corporate costs, such as corporate management
        compensation, corporate legal, accounting and governance costs and certain
        insurance and facilities costs. Operating results presented for the business
        segments of the Company are as follows (in thousands):
 
 Segment
        information for the years ended December 31:
 
 **2005**
              
              **2004**
              
              **2003****Revenues:**Wireless
                  services
              
              $
              4,931
              
              $
              6,029
              
              $
              11,878Prepaid
                  services
              
              
              3,147
              
              
              193
              
              
              --Corporate
              
              
              --
              
              
              --
              
              
              --8,078
              
              
              6,222
              
              
              11,878**Depreciation
                  and amortization:**Wireless
                  services
              
              
              1,124
              
              
              1,486
              
              
              2,993Prepaid
                  services
              
              
              --
              
              
              --
              
              
              --Corporate
              
              
              --
              
              
              --
              
              
              --1,124
              
              
              1,486
              
              
              2,993**Operating
                  loss:**Wireless
                  services
              
              
              (1,757
              )
              
              (2,688
              )
              
              (3,998
              )Prepaid
                  services
              
              
              (1,014
              )
              
              (222
              )
              
              --Corporate
              
              
              (2,525
              )
              
              (2,816
              )
              
              (6,059
              )(5,296
              )
              
              (5,726
              )
              
              (10,057
              )Gain
                  on sale of subscribers
              
              
              --
              
              
              --
              
              
              1,756Settlement
                  gains, net
              
              
              --
              
              
              1,494
              
              
              85Interest
                  (expense) income, net
              
              
              160
              
              
              (944
              )
              
              (275
              )160
              
              
              550
              
              
              1,566Net
                  loss before benefit from income taxes
              
              
              (5,136
              )
              
              (5,176
              )
              
              (8,491
              )Income
                  tax benefit
              
              
              764
              
              
              732
              
              
              284Net
                  loss
              
              $
              (4,372
              )
              $
              (4,444
              )
              $
              (8,207
              )
  F-18
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  Segment
        balance sheet information as of December 31:
 **Assets:**
                
                **2005**
                
                **2004**Wireless
                    services
                
                $
                7,975
                
                $
                9,937Prepaid
                    services
                
                
                378
                
                
                360Corporate
                
                
                5,722
                
                
                7,689$
                14,075
                
                $
                17,986**Capital
                    expenditures:**Wireless
                    services
                
                $
                188
                
                $
                138Prepaid
                    services
                
                
                34
                
                
                --Corporate
                
                
                --
                
                
                --$
                222
                
                $
                138
  **7.**
              **Relationship
                  with EarthLink, Inc.**
  On
        September 25, 2002, the Company formed a comprehensive relationship with
        EarthLink by entering into a series of agreements pursuant to which, among
        other
        things, EarthLink purchased certain of the Company’s
        subscribers (collectively, the “transferred subscribers).
  As
        a
        result of this relationship and the transfer of subscribers, the Company
        received and recorded approximately $1,756 of gains on sales of subscribers
        during 2003 and had remaining $50 of deferred revenue as of December 31,
        2004.
  **8.**
              **Acquisition
                  of Intangible Assets**
  On
        December 1, 2004, the Company acquired certain assets from Global Interactive,
        a
        provider of wireless products, services, and accessories. The total purchase
        price of approximately $442 included the issuance of 30,000 shares of the
        Company's common stock valued at $12.23 per share. The total purchase price
        was
        recorded as an intangible asset and has been amortized over 12 months.
  On
        September 1, 2004, the Company purchased certain assets relating to prepaid
        telephone calling cards. The total purchase price of approximately $75 was
        satisfied through the issuance of 24,671 shares of the Company's common stock.
        The total purchase price was recorded as an intangible asset and has been
        amortized over 12 months.
  F-19
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **9.**
              **Goodwill
                  and Other Intangible
                  Assets**
  Impairment
        Charge Recorded Under SFAS No. 142
  During
        the first half of 2003, the Company identified indicators of impairment,
        including changes in the Company's operating and cash flow forecasts, and
        changes in its strategic plans for certain of its acquired businesses, which
        required that the Company evaluate the appropriateness of the carrying value
        of
        its long-lived assets, principally goodwill recorded upon the acquisitions
        of
        Outback. A write-down of goodwill totaling $193 was recorded in
        2003.
  The
        Company’s annual impairment test indicated that no impairment had occurred
        during 2005, 2004 and 2003 relative to Wynd.
  The
        following table summarizes the activity in goodwill for the periods
        indicated:
  Years
                  Ended December 31,2005
              
              2004
              
              2003Beginning
                  balance, net
              
              $
              6,000
              
              $
              6,000
              
              $
              6,193Impairment
                  charge
              
              
              --
              
              
              --
              
              
              (193
              )Ending
                  balance, net
              
              $
              6,000
              
              $
              6,000
              
              $
              6,000
  The
        following table summarizes other intangible assets subject to amortization
        at
        the dates indicated:
  December
                  31, 2005
              
              December
                  31, 2004Gross
              
              
              
              
              
              GrossCarrying
              
              Accumulated
              
              
              
              Carrying
              
              AccumulatedAmount
              
              Amortization
              
              Net
              
              Amount
              
              Amortization
              
              NetTrade
                  Names
              
              $
              4,572
              
              $
              (4,572
              )
              $
              --
              
              $
              4,572
              
              $
              (4,388
              )
              $
              184Technology
              
              
              3,017
              
              
              (3,017
              )
              
              --
              
              
              3,017
              
              
              (3,017
              )
              
              --Customer
                  Lists
              
              
              2,258
              
              
              (2,258
              )
              
              --
              
              
              2,258
              
              
              (2,258
              )
              
              --Patents
              
              
              1,000
              
              
              (1,000
              )
              
              --
              
              
              1,000
              
              
              (1,000
              )
              
              --Other
              
              
              935
              
              
              (935
              )
              
              --
              
              
              935
              
              
              (480
              )
              
              455$
              11,782
              
              $
              (11,782
              )
              $
              --
              
              $
              11,782
              
              $
              (11,143
              )
              $
              639
 F-20
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **10.**
              **Impairment
                  of Other Long-lived Assets**
  During
        the year ended December 31, 2003, the Company identified indicators of possible
        impairment of its other long-lived assets. Such indicators included the
        continued deterioration in the business climate for wireless Internet service
        providers, significant declines in the market values of the Company's
        competitors in the wireless Internet services industry, recent changes in
        the
        Company's operating and cash flow forecasts, and changes in our strategic
        plans.
        Based on these factors, the Company initiated significant reductions in its
        workforce resulting in impairment to its property and equipment, principally
        software and furniture and fixtures. The impairment charge was calculated
        assuming no salvage value to be obtained from the assets. As a result, the
        Company recorded an impairment charge of $1,202 during the year ended December
        31, 2003 for assets no longer in use. Included in the charge for 2003 is
        $445,
        relating to equipment given back to Eastern Computer upon the Company’s default
        on related lease obligations (see note 4).
 
 **11.**
              **Supplemental
                  Balance Sheet Information**
  *Merchandise
        inventories:*
  During
        2005 and 2004, the Company recorded write-downs of approximately $12 and
        $84,
        respectively, in order to reflect inventory at the lower of cost or market.
        The
        write-down primarily relates to a lower of cost to market adjustment for
        wireless PDA models which remained unsold.
  Additionally,
        during 2003, the Company recorded reserves for excess inventory quantities
        of
        approximately $47. As of December 31, 2005, the Company had applied all reserves
        for excess inventory quantities to the related merchandise
        inventory.
  *Property,
        equipment and leasehold improvements:*
  Property,
        equipment and leasehold improvements consisted of the following:
  December
                  31,2005
              
              2004Furniture,
                  fixtures and equipment
              
              $
              754
              
              $
              754Computer
                  equipment and software
              
              
              7,125
              
              
              6,903Leasehold
                  improvements
              
              
              265
              
              
              2658,144
              
              
              7,922Less:
                  accumulated depreciation and amortization
              
              
              (7,467
              )
              
              (6,982
              )$
              677
              
              $
              940
  F-21
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  *Accrued
        expenses:*
  Accrued
        expenses consisted of the following:
  December
                  31,2005
              
              2004Franchise
                  taxes
              
              $
              190
              
              $
              --Professional
                  fees
              
              
              181
              
              
              169Carrier
                  services
              
              
              122
              
              
              109Employee
                  compensation
              
              
              95
              
              
              128Dealer
                  commissions
              
              
              73
              
              
              7Consideration
                  for acquired intangibles
              
              
              --
              
              
              45Acquired
                  subscriber withheld consideration
              
              
              --
              
              
              44Inventory
                  purchases
              
              
              --
              
              
              22Marketing
                  expenses
              
              
              --
              
              
              3Other
              
              
              15
              
              
              11$
              676
              
              $
              538
 
 **12.**
              **Commitments
                  and Contingencies**
  On
        February 15, 2002, Eagle Truck Lines Inc. (a/k/a Air Eagle, Inc.) filed suit
        against GoAmerica, Inc. in the Superior Court of the State of California
        for the
        County of Los Angeles seeking payment of $590, plus other damages, expenses,
        interest and costs of suit. This action was removed to the United States
        District Court for the Central District of California and subsequently, pursuant
        to a motion brought by GoAmerica, transferred to the District of New Jersey
        where GoAmerica moved to have it consolidated with the action described in
        the
        next paragraph. Air Eagle alleged that GoAmerica, as successor in interest
        to
        Flash, failed to perform its obligations under a consulting contract dated
        July
        2, 1999 (the "Contract"), by and between Flash and Air Eagle. Air Eagle alleged
        that GoAmerica assumed the rights and liabilities under this Contract as
        a
        result of its purchase of substantially all of the assets of Flash in November
        2000. On September 19, 2003, Air Eagle filed for Chapter 11 bankruptcy
        protection in the United States Bankruptcy Court for the Central District
        of
        California. In December 2004, the parties agreed and received court approval
        to
        settle this litigation in consideration of GoAmerica’s paying Air Eagle $140 and
        Air Eagle principals’ agreeing to assist GoAmerica in the Company’s litigation
        against the Flash Defendants. The charge to settle this matter was included
        in
        settlement gains, net.
  F-22
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
 
 On
        September 22, 2004, Boundless Depot, LLC ("Boundless Depot") and Scott Johnson,
        one of two Boundless Depot shareholders, sued GoAmerica and Wynd Communications
        in the Superior Court of the State of California for the County of Los Angeles,
        claiming damages of one million dollars for GoAmerica's refusal to pay Boundless
        Depot unattained contingent consideration, comprised of cash and/or GoAmerica
        Common Stock, with respect to the Asset Purchase Agreement dated as of February
        8, 2003 (the "Deafwireless Agreement"), pursuant to which GoAmerica and Wynd
        Communications acquired certain Deafwireless assets. The total value of such
        contingent consideration, if all contingencies had been fully met and amounts
        paid immediately thereupon, would not have exceeded $211; however, the Company
        does not believe any of the contingent consideration is owed to Boundless
        Depot
        or either of its shareholders since conditions of the Deafwireless Agreement
        were not met and we incurred costs for which we are entitled to receive
        reimbursement from Boundless Depot or offset against any amounts that may
        become
        payable to Boundless Depot. Upon petition by GoAmerica and Wynd Communications,
        the Court has ordered this matter into arbitration, which process is now
        pending. The Company intends to defend this action vigorously and may elect
        to
        pursue counterclaims.
 
 Future
        minimum capital lease payments and future minimum lease payments relating
        to
        office space under noncancelable operating leases as of December 31, 2005
        are as
        follows:
  Year
                  ending December 31,
              
              Capital
                Leases
              
              Operating
                  Leases2006
              
              $
              31
              
              $
              2862007
              
              
              23
              
              
              1402008
              
              
              --
              
              
              --2009
              
              
              --
              
              
              --2010
              
              
              --
              
              
              --Thereafter
              
              
              --
              
              
              --Total
                  minimum lease payments
              
              
              54
              
              $
              426Less
                  amount representing interest
              
              
              (10
              )Present
                  value of net minimum capitallease
                  payments
              
              
              44Less
                  current portion of capital lease obligations
              
              
              (19
              )Obligations
                  under capital lease, net of current portion
              
              $
              25
 
 During
        2005, 2004 and 2003, total rent expense was approximately $301, $277 and
        $2,139,
        respectively.
  F-23
 **GOAMERICA,
            INC.**
  **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
            thousands, except share and per share data)**
 At
        December 31, 2005, a standby letter of credit totaling approximately $300
        was
        outstanding as a security deposit in favor of Velocita (formerly Cingular).
        As
        of December 31, 2005, $300 of cash held in the Company's bank accounts was
        restricted to secure this letter of credit. As of December 31, 2004, a
        standby leter of credit totaling approximately $600 was outstanding and $604
        of
        cash held in the Company's bank accounts was restricted to secure this letter
        of
        credit. The amount was reduced during 2005 as a result of an informal agreement
        with Velocita.
  During
        2005, the Company entered into employment agreements with certain of its
        key
        executives which provide for fixed compensation. These agreements generally
        continue until terminated by the employee or the Company and, under certain
        circumstances, provide for salary continuance for a specified period. The
        Company's maximum aggregate liability under the agreements if these employees
        were terminated is approximately $695 at December 31, 2005.
  **13.**
              **Benefit
                  Plan**
  The
        Company has established a defined contribution plan under Section 401(k)
        of the
        Internal Revenue Code, which provides for voluntary employee contributions
        of up
        to 15 percent of compensation for employees meeting certain eligibility
        requirements. The Company contributes to the plan up to a maximum of 3 percent.
        The Company’s contribution during 2005 was $42. Prior to 2005, the Company did
        not contribute to the plan.
  **14.**
              **Stockholders'
                  Equity**
  On
        December 19, 2003, the Company granted Sunrise Securities Corp. a warrant
        to
        purchase 10,150 shares of the Company's common stock at a price of $12.00
        per
        share as part of their compensation for securing bridge financing for the
        Company as described in note 5. This warrant was immediately exercisable
        at the
        date of grant. The warrant had an estimated fair market value at the date
        of
        grant of approximately $292 and was recorded as additional deferred debt
        expense. Such warrant was exercised during 2004.
  A
        one for
        ten reverse stock split was effected during May 2004. Additionally, a one
        for
        eight reverse stock split was effected during October 2004. The Company retained
        the current par value of $.01 per share for all shares of common stock. All
        references in the financial statements to the number of shares outstanding,
        per
        share amounts, and stock option data of the Company’s common stock have been
        restated to reflect the effect of both of the reverse stock splits for all
        periods presented. Stockholders’ equity reflects both of the reverse stock
        splits by reclassifying from “Common stock” to “Additional paid in capital” an
        amount equal to the par value of the reduced shares arising from the reverse
        splits.
  F-24
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  On
        May
        20, 2004, the Company’s Board of Directors authorized the repurchase of up to
        62,500 shares of its Common Stock pursuant to a new stock buyback program.
        As of
        December 31, 2005 and 2004, the Company had repurchased an aggregate of 24,063
        shares of its Common Stock at an average price of $7.75 per share. All purchases
        under the program have been made in the open market at the Company's
        discretion.
  The
        Company also issued warrants in 2003 relating to the settlement of their
        lease
        obligations (see note 3) and as part of the bridge note financing (see note
        5).
  As
        of
        December 31, 2005, the Company had reserved shares of common stock for issuance
        as follows:
  Exercise
                  of common stock options
              
              
              252,108Exercise
                  of common stock purchase warrants
              
              
              84,320Employee
                  stock purchase plan
              
              
              48,335
 
 **15.**
              **Stock
                  Option Plans and Other Stock-Based
                  Compensation**
  On
        August
        3, 1999, the Company adopted the GoAmerica Communications Corp. 1999 Stock
        Option Plan. This plan provided for the granting of awards to purchase shares
        of
        common stock. No further options will be made under the GoAmerica Communications
        Corp. 1999 Stock Option Plan.
  In
        December 1999, the Company's Board of Directors adopted the GoAmerica, Inc.
        1999
        Stock Plan (the "1999 Plan") as a successor plan to the GoAmerica Communications
        Corp. 1999 Stock Option Plan, pursuant to which 60,000 additional shares
        of the
        Company's common stock have been reserved for issuance to selected employees,
        non-employee directors and consultants. In May 2001, the Company’s shareholders
        approved an increase in the maximum number of shares issuable under the 1999
        Plan from 60,000 to 132,809 shares.
  In
        November 2005, the Company's Board of Directors adopted the 2005 Equity
        Compensation Plan (the "2005 Plan") as a successor plan to the GoAmerica,
        Inc.
        1999 Stock Option Plan, pursuant to which 400,000 additional shares of the
        Company's common stock have been reserved for issuance to selected employees,
        non-employee directors and consultants. In December 2005, the Company’s
        shareholders approved the 2005 Plan.
  Under
        the
        terms of the 2005 Plan, a committee of the Company's Board of Directors may
        grant options to purchase shares of the Company's common stock to employees
        and
        consultants of the Company at such prices that may be determined by the
        committee. The 2005 Plan provides for award grants in the form of incentive
        stock options, non-qualified stock options and restricted stock awards. Options
        granted under the 2005 Plan generally vest annually over 4 years and expire
        after 10 years.
  F-25
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
 On
        December 29, 2005 the Company’s Board of Directors approved the acceleration of
        vesting of certain unvested and “out of the money” stock options with exercise
        prices equal to or greater than $4.19 per share previously awarded to our
        employees, including our executive officers and directors, under the plan.
        The
        acceleration of vesting was effective for stock options outstanding as of
        December 29, 2005. Options to purchase approximately 31,518 shares of common
        stock or 86% of our outstanding unvested options were subject to the
        acceleration. The weighted average exercise price of the options that were
        accelerated was $19.93. As a result of this acceleration, the Company was
        required to perform a calculation under FASB Financial Interpretation FIN
        44 to
        determine if a charge resulted from the acceleration. Such computation did
        not
        require the recording of any additional expense. The purpose of the acceleration
        was to enable the Company to avoid recognizing compensation expense associated
        with these options in future periods in our Consolidated Statements of
        operations upon the adoption of SFAS 123R in January 2006. The Company also
        believes that because the options that were accelerated had exercise prices
        in
        excess of the current market value of the Company’s common stock, the options
        had limited economic value and were not fully achieving their original objective
        of incentive compensation and employee retention.
  The
        following table summarizes activity on a combined basis for the plans during
        2005, 2004 and 2003:
  Number
                  of
                Options
              
              Weighted-
                Average
                Exercise
                  PriceOutstanding
                  at January 1, 2003
              
              
              115,303
              
              $
              177.60Granted
              
              
              12,188
              
              $
              24.80Exercised
              
              
              (8,931
              )
              $
              40.00Cancelled
              
              
              (41,605
              )
              $
              292.00Outstanding
                  at December 31, 2003
              
              
              76,955
              
              $
              105.60Granted
              
              
              31,770
              
              $
              13.45Exercised
              
              
              (6,776
              )
              $
              29.23Cancelled
              
              
              (12,562
              )
              $
              118.14Outstanding
                  at December 31, 2004
              
              
              89,387
              
              $
              90.61Granted
              
              
              10,242
              
              $
              4.19Exercised
              
              
              --
              
              
              --Cancelled
              
              
              (2,521
              )
              $
              65.30Outstanding
                  at December 31, 2005
              
              
              97,108
              
              $
              72.59Exercisable
                  at December 31, 2005
              
              
              92,108
              
              $
              76.41Exercisable
                  at December 31, 2004
              
              
              48,459
              
              $
              127.20Exercisable
                  at December 31, 2003
              
              
              40,076
              
              $
              157.60Available
                  for grant at December 31, 2005
              
              
              155,000
              
              
              --
  F-26
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  The
        following table summarizes information about fixed price stock options
        outstanding at December 31, 2005:
  Outstanding
              
              ExercisableRange
                  of Exercise
                Prices
              
              Number
                Outstanding
              
              Weighted-
                Average
                  Exercise
                Price
              
              Weighted-
                Average
                Remaining
                Contractual
                  Life
              
              Number
                Exercisable
              
              Weighted-
                Average
                Exercise
                  Price$2.35-$4.19
              
              
              20,242
              
              
              $3.28
              
              
              
              9.3
                  years
              
              
              15,242
              
              
              
              $3.59$16.00-$26.40
              
              
              47,193
              
              
              $20.65
              
              
              
              6.2
                  years
              
              
              47,193
              
              
              
              $20.65$43.20-$44.80
              
              
              5,875
              
              
              $44.02
              
              
              
              5.5
                  years
              
              
              5,875
              
              
              
              $44.02$84.00-$84.80
              
              
              4,271
              
              
              $84.50
              
              
              
              5.1
                  years
              
              
              4,271
              
              
              
              $84.50$104.80-$151.20
              
              
              10,020
              
              
              $146.47
              
              
              
              6.9
                  years
              
              
              10,020
              
              
              
              $146.47$162.48-$167.20
              
              
              2,944
              
              
              $166.61
              
              
              
              4.8
                  years
              
              
              2,944
              
              
              
              $166.61$401.60-$600.00
              
              
              5,825
              
              
              $429.66
              
              
              
              5.1
                  years
              
              
              5,825
              
              
              
              $429.66$637.60
              
              
              13
              
              
              $637.60
              
              
              
              5.8
                  years
              
              
              13
              
              
              
              $637.60$1200.00-$1280.00
              
              
              725
              
              
              $1268.97
              
              
              
              5.6
                  years
              
              
              725
              
              
              
              $1268.9797,108
              
              
              
              
              
              
              
              
              
              92,108
 
 The
        weighted average fair value of options granted during 2005, 2004 and 2003
        was
        $2.79, $7.80 and $16.80, respectively.
  In
        December 2005, the Company issued 245,000 shares of common stock under the
        2005
        Plan in the form of restricted stock awards. These shares were issued as
        an
        incentive to retain key employees and officers and will vest over 3 years.
        Upon
        issuance of restricted stock, unearned compensation, equivalent to the market
        price of the shares awarded, is charged to equity and amortized against income
        over the related vesting period.
  F-27
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  The
        following table discloses, for the years ended December 31, 2005, 2004 and
        2003,
        the number of options granted and certain weighted-average
        information:
  Year
                  ended December 31,2005
              
              2004
              
              2003Numberof
                  Options
              
              FairValue
              
              ExercisePrice
              
              Numberof
                  Options
              
              Fair
                Value
              
              ExercisePrice
              
              Number
                of
                  Options
              
              FairValue
              
              ExercisePriceExercise
                  price greater than market price
              
              
              --
              
              $
              --
              
              $
              --
              
              
              --
              
              $
              --
              
              $
              --
              
              
              --
              
              $
              --
              
              $
              --Exercise
                  price equals market price
              
              
              10,242
              
              $
              4.19
              
              $
              4.19
              
              
              31,770
              
              $
              13.45
              
              $
              13.45
              
              
              12,188
              
              $
              24.80
              
              $
              24.80Exercise
                  price less than market price
              
              
              --
              
              $
              --
              
              $
              --
              
              
              --
              
              $
              --
              
              $
              --
              
              
              --
              
              $
              --
              
              $
              --
 
 Pro
        forma
        information regarding net income and earnings per share is required by SFAS
        123,
        and has been determined as if the Company had accounted for its employee
        stock
        options under the fair value method of SFAS 123 (see note 1). For purposes
        of
        pro forma disclosures, the estimated fair value of the options is amortized
        to
        expense over the options' vesting period. The fair value for these options
        was
        estimated at the date of grant using the Black-Scholes option pricing model
        with
        the following assumptions for 2005, 2004 and 2003: weighted-average risk-free
        interest rate of 4.20%; expected volatility of 80%; no dividends; and a
        weighted-average expected life of the options of 2.0 years, 2.0 years and
        3.0
        years, respectively.
  In
        December 1999, the Company's Board of Directors adopted the Employee Stock
        Purchase Plan effective upon the Company's initial public offering of its
        common
        stock, which was completed on April 12, 2000. The Company initially reserved
        50,000 shares of common stock for issuance under the plan. During 2003 there
        were 601 shares sold pursuant to the plan.
  F-28
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **16.**
              **Termination
                  of Hands On Merger
                  Agreement**
  On
        March
        1, 2006, the Company announced its receipt of a letter from Hands On, dated
        March 1, 2006, in which Hands On purportedly terminated the merger agreement
        among the parties. Subsequent discussions between the parties did not provide
        a
        basis to pursue the merger. Hands On stockholders had approved the proposed
        merger with GoAmerica at special Hands On stockholder meetings held on February
        22, 2006. A Special Meeting of GoAmerica Stockholders relating to the Company’s
        proposed merger with Hands On was scheduled for March 13, 2006, adjourned
        from
        February 27, 2006 in order to allow GoAmerica to achieve a quorum with respect
        to the Special Meeting. As of March 6, 2006, the Company had achieved a quorum
        and received votes overwhelmingly in favor of the Hands On merger. On March
        7,
        2006, the Company announced its cancellation of its Special Meeting of
        Stockholders and its determination not to pursue its proposed merger with
        Hands
        On.
 
 At
        December 31, 2005, the Company had loaned approximately $531, classified
        as
        other assets as of December 31, 2005, to Hands On pursuant to a short-term
        loan
        agreement between the parties, dated May 2, 2005. Pursuant to the agreement,
        these loans are secured by liens on the Hands On assets and are repayable
        12
        months from the date of the first advance or, begin June 1, 2006 and are
        scheduled to continue through February 2008, upon the termination of the
        merger
        agreement. In addition, the Company is entitled to receive interest at a
        at a
        simple interest rate per annum equal to the highest average prime rate charged
        by a majority of the 30 largest banks, as published in the Wall Street Journal
        and shall be payable to the Company on the same terms as any repayment of
        all
        advances. All overdue payments of principal and interest shall bear interest
        at
        a simple interest rate per annum of twelve percent (12%). The Company has
        notified Hands On to begin repayment of these loans.
 
 The
        Company has also incurred approximately $280 of merger related expenses,
        classified as other assets at December 31, 2005, that will be written off
        as an
        expense during the first quarter of 2006.
  F-29
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **17.**
              **Income
                  Taxes**
  Significant
        components of the Company's deferred tax assets and liabilities are as
        follows:
  December
                  31,2005
              
              2004Deferred
                  tax assets:Net
                  operating loss carryforwards
              
              $
              69,238
              
              $
              70,587Deferred
                  compensation
              
              
              9,121
              
              
              8,635Reserves
                  and accruals
              
              
              105
              
              
              626Amortization
                  of goodwill
              
              
              3,524
              
              
              4,024Other
              
              
              2,648
              
              
              2,388Less
                  valuation allowance
              
              
              (84,635
              )
              
              (86,259
              )Deferred
                  tax assets
              
              
              1
              
              
              1Deferred
                  tax liabilities:Intangible
                  assets
              
              
              (1
              )
              
              (1
              )Net
                  deferred tax assets
              
              $
              --
              
              $
              --
 
 A
        reconciliation setting forth the differences between the effective tax rate
        of
        the Company and the U.S. statutory rate is as follows:
 Year
                  ended December 31,2005
              
              2004
              
              2003Statutory
                  federal income tax benefit at 34%
              
              $
              (1,487
              )
              $
              (1,511
              )
              $
              (2,764
              )State
                  income tax benefit, net of federal benefit
              
              
              (1,002
              )
              
              (962
              )
              
              (748
              )Non-deductible
                  expenses
              
              
              168
              
              
              23
              
              
              481Other,
                  primarily changes in net operating loss carryforwards
                  available
              
              
              3,178
              
              
              2,763
              
              
              1,976Change
                  in valuation allowance
              
              
              (1,621
              )
              
              (1,045
              )
              
              771Total
              
              $
              (764
              )
              $
              (732
              )
              $
              (284
              )
 
 The
        state
        tax benefits recorded in 2005, 2004 and 2003 of $764, $732 and $284,
        respectively, are attributable to the Company’s sale of certain state net
        operating loss carryforwards.
  F-30
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  At
        December 31, 2005, the Company had federal and state net operating loss ("NOL")
        carryforwards of approximately $179,400 and $137,500, respectively. The federal
        NOL carryforwards expire beginning in 2011 and state NOL’s beginning in 2006.
        The Tax Reform Act of 1986 enacted a complex set of rules limiting the potential
        utilization of net operating loss and tax credit carryforwards in periods
        following a corporate "ownership change." In general, for federal income
        tax
        purposes, an ownership change is deemed to occur if the percentage of stock
        of a
        loss corporation owned (actually, constructively and, in some cases, deemed)
        by
        one or more "5% shareholders" has increased by more than 50 percentage points
        over the lowest percentage of such stock owned during a three-year testing
        period. During 1999, such a change in ownership occurred. As a result of
        the
        change, the Company's ability to utilize certain of its net operating loss
        carryforwards will be limited to approximately $1,400 of taxable income,
        per
        year. In addition, the Company acquired additional net operating losses through
        its acquisitions of Wynd and Hotpaper. The Company believes that an ownership
        change has occurred with respect to these entities. The effect of an ownership
        change would be the imposition of an annual limitation on the use of net
        operating loss carryforwards attributable to periods before the change. The
        Company has not performed a detailed analysis to determine the amount of
        the
        potential limitations. In addition, the Company has not performed a detailed
        analysis to determine the amount of the potential limitations as a result
        of the
        March 2004 Financing, described in note 5.
  F-31
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **18.**
              **Quarterly
                  Financial Data (Unaudited)**
  The
        table
        below summarizes the Company's unaudited quarterly operating results for
        the
        years ended December 31, 2005 and 2004.
  Quarter
                  Ended**2005**
              
              
              March
                  31
              
              
              June
                  30
              
              
              September
                  30
              
              
              December
                  31Net
                  revenue
              
              $
              2,028
              
              $
              1,908
              
              $
              2,294
              
              $
              1,848Cost
                  of revenue
              
              
              (1,314
              )
              
              (1,079
              )
              
              (1,676
              )
              
              (1,331
              )Operating
                  expenses
              
              
              (1,409
              )
              
              (1,555
              )
              
              (1,400
              )
              
              (2,486
              )Depreciation
                  and amortization expenses
              
              
              (351
              )
              
              (347
              )
              
              (241
              )
              
              (185
              )Interest
                  (expense) income, net
              
              
              38
              
              
              38
              
              
              29
              
              
              55Benefit
                  from income taxes
              
              
              --
              
              
              --
              
              
              --
              
              
              764Net
                  (loss)
              
              $
              (1,008
              )
              $
              (1,035
              )
              $
              (994
              )
              $
              (1,335
              )Net
                  (loss) per common share:-
                  Basic
              
              $
              (0.48
              )
              $
              (0.49
              )
              $
              (0.48
              )
              $
              (0.60
              )-
                  Diluted
              
              $
              (0.48
              )
              $
              (0.49
              )
              $
              (0.48
              )
              $
              (0.60
              )**2004**
              
              
              March
                  31
              
              
              June
                  30
              
              
              September
                  30
              
              
              December
                  31Net
                  revenue
              
              $
              1,948
              
              $
              1,597
              
              $
              1,370
              
              $
              1,307Cost
                  of revenue
              
              
              (1,195
              )
              
              (974
              )
              
              (733
              )
              
              (831
              )Operating
                  expenses
              
              
              (1,865
              )
              
              (1,651
              )
              
              (1,511
              )
              
              (1,702
              )Depreciation
                  and amortization expenses
              
              
              (532
              )
              
              (399
              )
              
              (267
              )
              
              (288
              )Settlement
                  gains, net
              
              
              1,621
              
              
              --
              
              
              (140
              )
              
              13Interest
                  (expense) income, net
              
              
              (1,065
              )
              
              36
              
              
              38
              
              
              47Benefit
                  from income taxes
              
              
              --
              
              
              --
              
              
              --
              
              
              732Net
                  (loss)
              
              $
              (1,088
              )
              $
              (1,391
              )
              $
              (1,243
              )
              $
              (722
              )Net
                  (loss) per common share:-
                  Basic
              
              $
              (1.09
              )
              $
              (0.68
              )
              $
              (0.61
              )
              $
              (0.35
              )-
                  Diluted
              
              $
              (1.09
              )
              $
              (0.68
              )
              $
              (0.61
              )
              $
              (0.35
              )
  F-32
 **GOAMERICA,
          INC.**
  **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS**
  **(In
          thousands, except share and per share data)**
  **19.**
              **Supplemental
                  Cash Flow Information**
  The
        table
        below presents the Company's supplemental disclosure of cash flow information
        for the years ended December 31, 2005, 2004 and 2003.


**Years
                  ended December 31,****2005**
              
              **2004**
              
              **2003**Supplemental
                  disclosure of cash flow information:Interest
                  paid
              
              $
              28
              
              $
              32
              
              $
              21Acquisition
                  of equipment through capital leases
              
              
              108
              
              
              --
              
              
              --Non-cash
                  investing and financing activities:Beneficial
                  conversion feature of convertible bridge note payable
              
              
              --
              
              
              --
              
              
              528Conversion
                  of bridge note payable into common stock
              
              
              --
              
              
              1,015
              
              
              --Application
                  of deferred financing costs against proceeds from the sale of
                  stock
              
              
              --
              
              
              606
              
              
              --Issuance
                  of shares pursuant to management contract
              
              
              1,245
              
              
              --
              
              
              --Issuance
                  of shares for vendor settlements
              
              
              --
              
              
              450
              
              
              --Issuance
                  of shares to acquire intangible assets
              
              
              --
              
              
              442
              
              
              --Issuance
                  of warrant to placement agent to secure financing
              
              
              --
              
              
              --
              
              
              292Restricted
                  cash utilized to pay accrued expenses
              
              
              --
              
              
              --
              
              
              556Conversion
                  of capital lease obligation into an account payable
              
              
              --
              
              
              --
              
              
              152Accrued
                  expenses related to acquisition of subscribers
              
              
              --
              
              
              --
              
              
              50Accrued
                  expenses related to the incurrence of deferred financing
                  expense
              
              
              --
              
              
              --
              
              
              70
 
 
   F-33
 Schedule II   **GOAMERICA,
        INC.**
 **FINANCIAL
        STATEMENT SCHEDULE**
 
 **Valuation
        and Qualifying Accounts and Reserves**
  **Years
        Ended December 31, 2005, 2004 and 2003**
  **Balance
                  at**
                **Beginning**
                **of
                  Period**
              
              **Additions:**
                **Charged
                  to Costs**
                **and
                  Expenses**
              
              **Deductions**
              
              **Balance
                  at**
                **End
                  of Period****Year
                  Ended December 31, 2005**Allowance
                  for doubtful accounts
              
              $
              603
              
              $
              318
              
              $
              643
              (1)
              
              $
              278Inventory
                  Reserve
              
              
              --
              
              
              12
              
              
              12
              (3)
              
              
              --**Year
                  Ended December 31, 2004**Allowance
                  for doubtful accounts
              
              $
              1,213
              
              $
              239
              
              $
              849
              (1)
              
              $
              603Inventory
                  Reserve
              
              
              --
              
              
              84
              
              
              84
              (3)
              
              
              --**Year
                  Ended December 31, 2003**Allowance
                  for doubtful accounts
              
              $
              3,418
              
              $
              534
              
              $
              2,739
              (1)
              
              $
              1,213Inventory
                  Reserve
              
              
              --
              
              
              47
              
              
              47
              (3)
              
              
              --Sales
                  allowances, discounts & returns
              
              
              513
              
              
              134
              
              
              647
              (2)
              
              
              --
 
 (1) Uncollectible
        accounts written-off, net of recoveries.
 (2) Returns
        and discounts charged to reserve.
 (3) Inventory
        discounts charged to reserve.
   F-34