----

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| Large Accelerated Filer  o   | Non-Accelerated Filer  o            |   |
|--------------------------------------------------|-----------------------------------------------|--------|
|  Accelerated Filer  o   |  Smaller Reporting Company x   |

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|                                                                           |                                  |   | Feb. 28, 2011 |        |   | Nov. 30, 2010 |       |
|--------------------------------------------------------------------------------|---------------------------------------|--------|---------------|-------------|--------|---------------|------------|
| Assets                                                                         |                                  |   | (Unaudited)   |        |   |          |       |
| Current assets:                                                                |                                  |   |          |        |   |          |
|   Cash and cash equivalents                                          |                                  | $      | 26,273        |        |   | $             | 31,653     |   |
|   Accounts receivable, net                                           |                                  |   | 100,417       |        |   |          | 90,038     |   |
|   Prepaid expenses and other current assets                          |                                  |   | 31,895        |        |   |          | 40,961     |   |
|                                                                           | Totat current assets                  |   |          | 158,585     |   |          |       | 162,652 |   |
|                                                                           |                                  |   |          |        |   |          |       |   |   |
| Other assets                                                                   |                                  |   |          | 41,411      |   |          |       | 43,819 |   |
|                                                                           | Total assets                          |   | $             | 199,996     |   |          | $          | 206,471 |   |
|                                                                           |                                  |   |          |        |   |          |       |   |   |
| Liabilities and Stockholders' Equity Deficiency                                |                                  |   |          |        |   |          |       |   |
|                                                                           |                                  |   |          |        |   |          |       |   |   |
| Current liabilites:                                                            |                                  |   |          |        |   |          |       |   |
|   Current maturities of long-term debt and caiptal lease obligations |                                  | $      | 14,438,910    |        |   | $             | 14,130,578 |   |
|   Accounts payable and accrued expenses                              |                                  |   | 2,548,525     |        |   |          | 2,515,769  |   |
|                                                                           | Total current liabiliies              |   |          | 16,987,435  |   |          |       | 16,646,347 |   |
|                                                                           |                                  |   |          |        |   |          |       |   |   |
|   Accrued pension obligation                                         |                                  |   | 1,381,395     |        |   |          | 1,369,395  |   |
|                                                                           | Total liabilities                     |   |          | 18,368,830  |   |          |       | 18,015,742 |   |
|                                                                           |                                  |   |          |        |   |          |       |   |   |
| Stockholders' equity deficiency:                                               |                                  |   |          |        |   |          |       |   |
|   Perferred stock,$.10 par value;1,000,000 shares                    |                                  |   |          |        |   |          |       |   |
|     authorized , none issued and outstanding               |                                  |   | -             |        |   |          | -          |   |
|   Common stock, $.10 par value; 150,000,000 shares                   |                                  |   |          |        |   |          |       |   |
|   authorized, 15,870,359 and 6,871,605 shares issued and             |                                  |   |          |        |   |
|    outstanding in 2011 and 2010                                 |                                  |   | 1,587,036     |        |   |          | 687,161    |   |
|   Capital in excess of par value                                     |                                  |   | 31,381,115    |        |   |          | 31,852,584 |   |
|   Deficit                                                            |                                  |   |          | (51,139,294 | )      |          |       | (50,350,805 | ) |
|    Accumulated comprehensive income                             |                                  |   | 2,309         |        |   |          | 1,789      |   |
|                                                                           | Total stockholders' equity deficiency |   |          | (18,168,834 | )      |          |       | (17,809,271 | ) |
| Total liabilities and stockholders' equity deficiency                          |                                  | $      | 199,996       |        |   | $             | 206,471    |   |
|                                                                           |                                  |   |          |        |   |          |       |   |   |
| See notes to the condensed consolidated financial statements.                  |                                  |   |          |        |   |

----

|                                                          |   | For the Three Months Ended |       |   |          |   |
|---------------------------------------------------------------|--------|----------------------------|------------|--------|---------------|--------|
|                                                          |   | Feb. 28, 2011              |       |   | Feb. 28, 2010 |   |
|                                                          |   |                       |       |   |          |   |
| Revenues                                                      |   | $                          | 319,671    |   |          | $      | 374,767 |   |
|                                                          |   |                       |       |   |          |   |   |   |
| Cost and expenses:                                            |   |                       |       |   |          |   |   |   |
| Costs of services                                             |   |                       | 197,405    |   |          |   | 311,444 |   |
| Selling, general and administrative                           |   |                       | 436,113    |   |          |   | 583,243 |   |
| Total costs and expenses                                      |   |                       | 633,518    |   |          |   | 894,687 |   |
|                                                          |   |                       |       |   |          |   |   |   |
| Loss from operations                                          |   |                       | (313,847   | )      |          |   | (519,920 | ) |
|                                                          |   |                       |       |   |          |   |   |   |
| Other income (expense):                                       |   |                       |       |   |          |   |   |   |
| Interest expense                                              |   |                       | (482,161   | )      |          |   | (328,127 | ) |
| Other, net                                                    |   |                       | 7,520      |   |          |   | - |   |
| Total other income (expense)                                  |   |                       | (474,641   | )      |          |   | (328,127 | ) |
|                                                          |   |                       |       |   |          |   |   |   |
| Net income (loss)                                             |   |                       | (788,488   | )      |          |   | (848,047 | ) |
|                                                          |   |                       |       |   |          |   |   |   |
| Other comprehensive loss-                                     |   |                       |       |   |          |   |   |   |
| foreign currency translation adjustment                       |   |                       | 520        |   |          |   | (73 | ) |
| Comprehensive income (loss)                                   |   | $                          | (787,968   | )      |          | $      | (848,120 | ) |
|                                                          |   |                       |       |   |          |   |   |   |
| Basic earnings (loss) per share                               |   | $                          | (0.08      | )      |          | $      | (0.29 | ) |
| Diluted earnings (loss) per share                             |   | $                          | (0.08      | )      |          | $      | (0.29 | ) |
|                                                          |   |                       |       |   |          |   |   |   |
| Weighted average number of common shares outstanding:         |   |                       |       |   |          |   |   |   |
| Basic                                                         |   |                       | 10,234,574 |   |          |   | 2,906,938 |   |
| Diluted                                                       |   |                       | 10,234,574 |   |          |   | 2,906,938 |   |
|                                                          |   |                       |       |   |          |   |   |   |
| See notes to the condensed consolidated financial statements. |   |                       |       |   |          |   |   |   |

----

|                                                          |   | For the Three Months Ended |     |
|---------------------------------------------------------------|--------|----------------------------|----------|
|                                                          |   | Feb. 28, 2011              |     |   | Feb. 28, 2010 |   |
| Net cash used in operating activities:                        |   | $                          | (154,832 | ) |   | $ | (124,024 | ) |
|                                                          |   |                       |     |   |   |   |   |   |
| Cash flows from financing activities:                         |   |                       |     |   |   |   |   |   |
|    Repayment of long-term debt                 |   |                       | (1,048   | ) |   |   | (2,415 | ) |
|    Proceeds from short-term borrowing          |   |                       | 58,000   |   |   |   | 47,000 |   |
|    Proceeds from exercise of options           |   |                       | 7,500    |   |   |   | 10,000 |   |
|    Proceeds from the sale of stock             |   |                       | 85,000   |   |   |   | 35,500 |   |
|    Net cash provided by financing activities   |   |                       | 149,452  |   |   |   | 90,085 |   |
|                                                          |   |                       |     |   |   |   |   |   |
| Decrease in cash and cash equivalents                         |   |                       | (5,380   | ) |   |   | (33,939 | ) |
| Cash and cash equivalents at beginning of period              |   |                       | 31,653   |   |   |   | 35,993 |   |
| Cash and cash equivalents at the end of period                |   | $                          | 26,273   |   |   | $ | 2,054 |   |
|                                                          |   |                       |     |   |   |   |   |   |
| See notes to the condensed consolidated financial statements. |   |                       |     |   |   |

----

----

----

| ·   | The availability of additional funds to successfully pursue our business plan; |
|--------------------|--------------------------------------------------------------------------------|

| ·   | The cooperation of our lender, which has not demanded repayment of our debt that was due in September 2010; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | The cooperation of industry service partners that have signed agreements with us; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | Our ability to market our services to current and new customers and to generate customer demand for our products and services in the geographical areas in which we operate; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The impact of changes the Federal Communications Commission or State Public Service Commissions may make to existing telecommunication laws and regulations, including laws dealing with Internet telephony; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our ability to comply with provisions of our financing agreements; |
|--------------------|--------------------------------------------------------------------|

| ·   | The highly competitive nature of our industry; |
|--------------------|------------------------------------------------|

| ·   | The acceptance of telephone calls over the Internet by mainstream consumers; |
|--------------------|------------------------------------------------------------------------------|

| ·   | Our ability to retain key personnel; |
|--------------------|--------------------------------------|

| ·   | Our ability to maintain adequate customer care and manage our churn rate; |
|--------------------|---------------------------------------------------------------------------|

| ·   | The impact of adverse tax or regulatory rulings or actions affecting our operations, including the imposition of taxes, fees and penalties; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our ability to maintain, attract and integrate internal management, technical information and management information systems; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our ability to manage rapid growth while maintaining adequate controls and procedures; |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | The availability and maintenance of suitable vendor relationships, in a timely manner, at reasonable cost; |
|--------------------|------------------------------------------------------------------------------------------------------------|

| ·   | The decrease in telecommunications prices to consumers; and |
|--------------------|-------------------------------------------------------------|

| ·   | General economic conditions. |
|--------------------|------------------------------|

----

| The following table summarizes components of long-term debt and capital lease obligations as of February 28, 2011 and November 30, 2010: |
|------------------------------------------------------------------------------------------------------------------------------------------|

| Principal lender:             |   | Feb. 28, 2011 |       |   | Nov. 30, 2010 |   |       | Interest Rate |   |
|-------------------------------|--------|---------------|------------|--------|---------------|--------|------------|---------------|--------|
|                          |   |          |       |   |          |   |       |          |   |
| Note dated November 30, 2005  |   | $             | 2,289,224  |   |          | $      | 2,261,281  |          |   |   | 5.25 | % |
| Note dated May 31, 2006       |   |          | 1,662,350  |   |          |   | 1,642,059  |          |   |   | 5.25 | % |
| Note dated September 28, 2007 |   |          | 5,266,564  |   |          |   | 5,153,932  |          |   |   | 9.75 | % |
| Note dated May 28, 2008       |   |          | 2,320,846  |   |          |   | 2,230,658  |          |   |   | 20.00 | % |
| Note dated October 29, 2008   |   |          | 1,460,031  |   |          |   | 1,414,968  |          |   |   | 15.00 | % |
| Note date February 15, 2009   |   |          | 811,653    |   |          |   | 792,164    |          |   |   | 20.00 | % |
| Note dated October 6, 2009    |   |          | 12,010     |   |          |   | 11,634     |          |   |   | 5.25 | % |
| Note dated November, 2009     |   |          | 53,506     |   |          |   | 52,849     |          |   |   | 5.25 | % |
|                          |   |          |       |   |          |   |       |          |   |   |   |   |
| Total principal lender debt   |   |          | 13,876,184 |   |          |   | 13,559,545 |          |   |   |   |   |
|                          |   |          |       |   |          |   |       |          |   |   |   |   |
| Short-term borrowings         |   |          | 493,668    |   |          |   | 487,576    |          |   |   | 12.00% - 24.00 | % |
| Capital lease obligations     |   |          | 69,058     |   |          |   | 83,457     |          |   |   | 12.00% - 17.00 | % |
|                          |   |          |       |   |          |   |       |          |   |   |   |   |
| Total                         |   | $             | 14,438,910 |   |          | $      | 14,130,578 |          |   |   |   |   |

----

----

| Level 1 | inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the company has the ability to access at the measurement date. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 2 | inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                          |   | Total  |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|-------------------------------|--------|--------|--------|--------|-----------|--------|--------|-----------|--------|--------|-----------|--------|
|                          |   |   |   |   |      |   |   |      |   |   |      |   |
|  February 28, 2011  |   |   |   |   |      |   |   |      |   |   |      |   |
|                          |   |   |   |   |      |   |   |      |   |   |      |   |
| Derivative liability          |   | $      | 61,374 |   |      |   | -      |      |   | $      | 61,374    |   |   |   | - |   |
|                          |   |   |   |   |      |   |   |      |   |   |      |   |   |   |   |   |
|  November 30, 2010  |   |   |   |   |      |   |   |      |   |   |      |   |   |   |   |   |
|                          |   |   |   |   |      |   |   |      |   |   |      |   |   |   |   |   |
| Derivative liability          |   | $      | 70,519 |   |      |   | -      |      |   | $      | 70,519    |   |   |   | - |   |

----

----

| ·   | Capitalize on our technology expertise to support new products and features. Our proprietary VoIP technology gives us the ability to offer leading-edge services and control our product development cycle.  Our ability to quickly test new IP devices on our network, including video softphones, IPTV, WiFi-enabled VoIP phones and Mobile VoIP phones, allows us to continuously offer the best and newest products as they become available.  We are not dependent upon one or two device manufacturers, which has resulted in considerable cost savings, greater capacity and flexibility per port, and the ability to provide convergent solutions with new features, services and service creation capabilities in a timely manner. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Focus on offering enhanced calling features to Video calling services.  The video phone that we support contains compression technology that allows us to provide real-time video calling with very efficient bandwidth usage.  Our ability to customize the video phone to the needs of wholesale customers, such as sending video ads to the phone, allowing simultaneous ringing to more than one video phone, allowing our video customers to make calls to video phones on a competitors’ network, or routing certain calls to a switch specified by the customer, has allowed us to enter discussions and attract customers in several instances where our competitors had no solutions to offer. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Continue to utilize back-office automation.  We believe that to achieve our objective we need to have “cradle to grave” automation of our back-office web and billing systems.  We have written our software for maximum automation, flexibility and changeability.  We know from experience in provisioning complex telecom orders that back-office automation is a key factor in keeping overhead costs low.  Technology continues to work 24 hours a day and we believe that the fewer people a company has in the back office, the more efficiently it can run, which should drive down the cost per order. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ·   | recording complex financial transactions, primarily in the analysis and calculation of debt financings, transaction involving taxes and the issuance of warrants and options. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 31.1 | Certification of our Chief Executive Officer and Chief Financial Officer, Paul H. Riss, Pursuant to 18 U.S.C. 1350 (Section 302 of the Sarbanes-Oxley Act of 2002) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification of our Chief Executive Officer and Chief Financial Officer, Paul H. Riss, Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | 31.1 | Certification of our Chief Executive Officer and Chief Financial Officer, Paul H. Riss, Pursuant to 18 U.S.C. 1350 (Section 302 of the Sarbanes-Oxley Act of 2002) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification of our Chief Executive Officer and Chief Financial Officer, Paul H. Riss, Pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----