----

----

|  (Mark One) |                                                                                                                                                                                                                  |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |                                                                                                                                                                                                                  |
| x                | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                               |
|             |                                                                                                                                                                                                                  |
|             | For the quarterly period ended September 30, 2010                                                                                                                                                                     |
|             |                                                                                                                                                                                                                  |
|             | Or                                                                                                                                                                                                                    |
|             |                                                                                                                                                                                                                  |
| o                | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934                                                                                                                              |
|             |                                                                                                                                                                                                                  |
|             | For the transition period from                               to |

| (Exact Name of Registrant as Specified in Its Charter) |
|--------------------------------------------------------|

| Delaware                                                       |   | 52-2126395                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
| 505 Third Avenue East, Oneonta, Alabama                        |   | 35121                                |
| (Address of Principal Executive Offices)                       |   | (Zip Code)                           |

| (Registrant’s Telephone Number, Including Area Code) |
|------------------------------------------------------------|

| (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) |
|------------------------------------------------------------------------------------|

| Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o |
|---------------------------|---------------------|-------------------------|-----------------------------|

| Class                                            |   | Outstanding atNovember 4, 2010 |
|--------------------------------------------------|--------|--------------------------------|
| Class A Common Stock ($0.01 par value per share) |   | 13,221,404                     |
| Class B Common Stock ($0.01 par value per share) |   | 0                              |

----

|                         |                                                                                                         | Page   |
|------------------------------|--------------------------------------------------------------------------------------------------------------|--------|
|                         |                                                                                                         |   |
| PART I FINANCIAL INFORMATION | 2                                                                                                            |   |
| Item 1.                      | Financial Statements                                                                                         | 2      |   |
|                         | Consolidated Balance Sheets as of December 31, 2009 and September 30, 2010                                   | 2      |   |
|                         | Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2009 and 2010 | 3      |   |
|                         | Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and 2010                  | 4      |   |
|                         | Notes to Consolidated Financial Statements                                                                   | 5      |   |
| Item 2.                      | Management’s Discussion and Analysis of Financial Condition and Results of Operations                  | 11     |   |
| Item 3.                      | Quantitative and Qualitative Disclosures about Market Risk                                                   | 21     |   |
| Item 4.                      | Controls and Procedures                                                                                      | 21     |   |
|                         |                                                                                                         |   |
| PART II OTHER INFORMATION    | 22                                                                                                           |   |
| Item 6.                      | Exhibits                                                                                                     | 22     |   |

----

----

PART I  FINANCIAL INFORMATION

| Item 1. | Financial Statements |
|---------|----------------------|

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                         |   | December 31, |        |   | September 30, |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|--------|---------------|--------|
|                                                                                                                                         |   | 2009         |        |   | 2010          |   |
|                                                                                                                                         |   |         |        |   | (unaudited)   |   |
| Assets                                                                                                                                       |   |         |        |   |          |   |
| Current assets                                                                                                                               |   |         |        |   |          |   |
| Cash and cash equivalents                                                                                                                    |   | $            | 17,731,044  |   |          | $      | 23,476,300 |   |
| Accounts receivable:                                                                                                                         |   |         |        |   |          |   |   |   |
| Due from subscribers, net of allowance for doubtful accountsof $473,572 and $285,687, respectively                                           |   |         | 4,650,909   |   |          |   | 4,850,888 |   |
| Unbilled receivables                                                                                                                         |   |         | 2,444,979   |   |          |   | 2,450,710 |   |
| Other                                                                                                                                        |   |         | 3,200,945   |   |          |   | 4,299,743 |   |
| Materials and supplies                                                                                                                       |   |         | 1,969,966   |   |          |   | 1,764,132 |   |
| Prepaid expenses                                                                                                                             |   |         | 1,342,249   |   |          |   | 1,085,660 |   |
| Income tax receivable                                                                                                                        |   |         | 389,486     |   |          |   | - |   |
| Deferred income taxes                                                                                                                        |   |         | 744,531     |   |          |   | 744,531 |   |
| Total current assets                                                                                                                         |   |         | 32,474,109  |   |          |   | 38,671,964 |   |
|                                                                                                                                         |   |         |        |   |          |   |   |   |
| Property and equipment, net                                                                                                                  |   |         | 69,028,973  |   |          |   | 64,161,637 |   |
| Goodwill                                                                                                                                     |   |         | 188,190,078 |   |          |   | 188,190,078 |   |
| Intangible assets, net                                                                                                                       |   |         | 34,218,115  |   |          |   | 27,847,650 |   |
| Investments                                                                                                                                  |   |         | 1,991,158   |   |          |   | 1,972,026 |   |
| Deferred financing costs                                                                                                                     |   |         | 6,964,015   |   |          |   | 6,099,849 |   |
| Deferred income taxes                                                                                                                        |   |         | 4,482,430   |   |          |   | 4,482,430 |   |
| Prepaid expenses                                                                                                                             |   |         | -           |   |          |   | 49,671 |   |
| Other assets                                                                                                                                 |   |         | 179,325     |   |          |   | 102,844 |   |
| Total assets                                                                                                                                 |   | $            | 337,528,203 |   |          | $      | 331,578,149 |   |
|                                                                                                                                         |   |         |        |   |          |   |   |   |
| Liabilities and Stockholders’ Equity (Deficit)                                                                                         |   |         |        |   |          |   |   |   |
| Current liabilities                                                                                                                          |   |         |        |   |          |   |   |   |
| Accounts payable                                                                                                                             |   | $            | 3,145,728   |   |          | $      | 2,177,787 |   |
| Accrued expenses                                                                                                                             |   |         | 6,167,023   |   |          |   | 6,816,482 |   |
| Advance billings and payments                                                                                                                |   |         | 1,665,422   |   |          |   | 1,636,601 |   |
| Deferred income taxes                                                                                                                        |   |         | 394,850     |   |          |   | 394,850 |   |
| Customer deposits                                                                                                                            |   |         | 172,109     |   |          |   | 182,359 |   |
| Total current liabilities                                                                                                                    |   |         | 11,545,132  |   |          |   | 11,208,079 |   |
|                                                                                                                                         |   |         |        |   |          |   |   |   |
| Deferred income taxes                                                                                                                        |   |         | 42,239,262  |   |          |   | 42,239,262 |   |
| Interest rate swaps                                                                                                                          |   |         | 1,592,813   |   |          |   | 3,014,095 |   |
| Advance billings and payments                                                                                                                |   |         | 698,352     |   |          |   | 667,314 |   |
| Other liabilities                                                                                                                            |   |         | 165,968     |   |          |   | 225,115 |   |
| Long-term notes payable                                                                                                                      |   |         | 273,717,301 |   |          |   | 277,734,114 |   |
| Total liabilities                                                                                                                            |   |         | 329,958,828 |   |          |   | 335,087,979 |   |
|                                                                                                                                         |   |         |        |   |          |   |   |   |
| Class B common convertible to senior subordinated notes                                                                                      |   |         | 4,085,033   |   |          |   | - |   |
|                                                                                                                                         |   |         |        |   |          |   |   |   |
| Stockholders’ equity (deficit)                                                                                                         |   |         |        |   |          |   |   |   |
| Class A Common Stock, $.01 par value-authorized 20,000,000 shares;issued and outstanding 12,676,733 and 13,221,404 shares, respectively |   |         | 126,767     |   |          |   | 132,214 |   |
| Class B Common Stock, $.01 par value-authorized 800,000 shares;issued and outstanding 544,671 and 0 shares, respectively                |   |         | 5,447       |   |          |   | - |   |
| Additional paid in capital                                                                                                                   |   |         | 10,340,862  |   |          |   | 3,251,990 |   |
| Retained deficit                                                                                                                             |   |         | (6,988,734  | )      |          |   | (6,894,034 | ) |
| Total stockholders’ equity (deficit)                                                                                                   |   |         | 3,484,342   |   |          |   | (3,509,830 | ) |
| Total liabilities and stockholders’ equity (deficit)                                                                                   |   | $            | 337,528,203 |   |          | $      | 331,578,149 |   |
|                                                                                                                                         |   |         |        |   |          |   |   |   |

----

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                               |   | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, |   |
|----------------------------------------------------|--------|--------------------------------------|------------|--------|--------------------------------|--------|
|                                               |   | 2009                                 |       |   | 2010                           |   |   | 2009 |   |   | 2010 |   |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |
| Revenues                                           |   |                                 |       |   |                           |   |   |   |   |   |   |   |
| Local services                                     |   | $                                    | 12,396,806 |   |                           | $      | 12,423,429 |   |   | $ | 36,315,205 |   |   | $ | 36,948,418 |   |
| Network access                                     |   |                                 | 8,517,512  |   |                           |   | 8,077,256 |   |   |   | 24,876,708 |   |   |   | 24,665,860 |   |
| Cable television                                   |   |                                 | 614,114    |   |                           |   | 717,344 |   |   |   | 1,833,164 |   |   |   | 2,081,918 |   |
| Internet                                           |   |                                 | 3,500,870  |   |                           |   | 3,520,835 |   |   |   | 10,542,696 |   |   |   | 10,559,067 |   |
| Transport services                                 |   |                                 | 1,373,832  |   |                           |   | 1,406,363 |   |   |   | 4,132,208 |   |   |   | 4,195,118 |   |
| Total revenues                                     |   |                                 | 26,403,134 |   |                           |   | 26,145,227 |   |   |   | 77,699,981 |   |   |   | 78,450,381 |   |
| Operating expenses                                 |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services and products                      |   |                                 | 10,445,442 |   |                           |   | 10,336,220 |   |   |   | 31,245,153 |   |   |   | 31,374,193 |   |
| Selling, general and administrative expenses       |   |                                 | 3,222,825  |   |                           |   | 3,307,743 |   |   |   | 10,142,354 |   |   |   | 9,775,255 |   |
| Depreciation and amortization                      |   |                                 | 6,525,796  |   |                           |   | 5,773,298 |   |   |   | 19,922,383 |   |   |   | 17,692,899 |   |
| Total operating expenses                           |   |                                 | 20,194,063 |   |                           |   | 19,417,261 |   |   |   | 61,309,890 |   |   |   | 58,842,347 |   |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                             |   |                                 | 6,209,071  |   |                           |   | 6,727,966 |   |   |   | 16,390,091 |   |   |   | 19,608,034 |   |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                             |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                   |   |                                 | (6,468,875 | )      |                           |   | (6,320,757 | ) |   |   | (19,514,730 | ) |   |   | (18,488,869 | ) |
| Change in fair value of derivatives                |   |                                 | (1,508,601 | )      |                           |   | (358,833 | ) |   |   | (1,169,872 | ) |   |   | (1,421,282 | ) |
| Other income                                       |   |                                 | 29,540     |   |                           |   | 150,790 |   |   |   | 267,911 |   |   |   | 533,649 |   |
| Total other expense                                |   |                                 | (7,947,936 | )      |                           |   | (6,528,800 | ) |   |   | (20,416,691 | ) |   |   | (19,376,502 | ) |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income tax                    |   |                                 | (1,738,865 | )      |                           |   | 199,166 |   |   |   | (4,026,600 | ) |   |   | 231,532 |   |
| Income tax (expense) benefit                       |   |                                 | 144,251    |   |                           |   | (136,091 | ) |   |   | 1,108,652 |   |   |   | (136,835 | ) |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders |   | $                                    | (1,594,614 | )      |                           | $      | 63,075 |   |   | $ | (2,917,948 | ) |   | $ | 94,697 |   |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average shares outstanding:               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                              |   |                                 | 12,676,733 |   |                           |   | 13,221,404 |   |   |   | 12,676,733 |   |   |   | 12,906,173 |   |
| Diluted                                            |   |                                 | 13,221,404 |   |                           |   | 13,221,404 |   |   |   | 13,221,404 |   |   |   | 13,221,404 |   |
| Basic net income (loss) per share                  |   | $                                    | (0.13      | )      |                           | $      | 0.00 |   |   | $ | (0.23 | ) |   | $ | 0.01 |   |
| Diluted net income (loss) per share                |   | $                                    | (0.13      | )      |                           | $      | 0.00 |   |   | $ | (0.23 | ) |   | $ | 0.01 |   |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Dividends declared per share                       |   | $                                    | 0.18       |   |                           | $      | 0.18 |   |   | $ | 0.53 |   |   | $ | 0.53 |   |
|                                               |   |                                 |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |

----

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                         |   | Nine Months EndedSeptember 30, |        |
|------------------------------------------------------------------------------|--------|--------------------------------|-------------|
|                                                                         |   | 2009                           |        |   | 2010 |   |
| Cash flows from operating activities:                                        |   |                           |        |   |   |   |
| Net income (loss)                                                            |   | $                              | (2,917,948  | ) |   | $ | 94,697 |   |
| Adjustments to reconcile net income to cash flows from operating activities: |   |                           |        |   |   |   |   |   |
| Depreciation                                                                 |   |                           | 10,594,257  |   |   |   | 10,164,224 |   |
| Amortization                                                                 |   |                           | 9,328,126   |   |   |   | 7,528,676 |   |
| Interest rate caplet                                                         |   |                           | 1,168,521   |   |   |   | - |   |
| Amortization of debt premium                                                 |   |                           | (60,759     | ) |   |   | (68,220 | ) |
| Amortization of loan costs                                                   |   |                           | 1,013,930   |   |   |   | 1,019,326 |   |
| Change in fair value of derivatives                                          |   |                           | 1,169,872   |   |   |   | 1,421,282 |   |
| Provision for deferred income taxes                                          |   |                           | 114,171     |   |   |   | - |   |
| Provision for uncollectible revenue                                          |   |                           | 271,536     |   |   |   | 179,634 |   |
| Changes in assets and liabilities; net of assets and liabilities acquired:   |   |                           |        |   |   |   |   |   |
| Accounts receivables                                                         |   |                           | 1,147,822   |   |   |   | (1,410,565 | ) |
| Material and supplies                                                        |   |                           | 212,913     |   |   |   | 205,834 |   |
| Prepaid expenses and other assets                                            |   |                           | 89,204      |   |   |   | 206,918 |   |
| Income tax receivable                                                        |   |                           | 175,644     |   |   |   | 389,486 |   |
| Accounts payable and accrued liabilities                                     |   |                           | (616,048    | ) |   |   | (306,542 | ) |
| Advance billings and payments                                                |   |                           | (395,019    | ) |   |   | (59,859 | ) |
| Other liabilities                                                            |   |                           | (19,216     | ) |   |   | 69,397 |   |
|                                                                         |   |                           |        |   |   |   |   |   |
| Net cash from operating activities                                           |   |                           | 21,277,006  |   |   |   | 19,434,288 |   |
|                                                                         |   |                           |        |   |   |   |   |   |
| Cash flows from investing activities:                                        |   |                           |        |   |   |   |   |   |
| Acquisition and construction of property and equipment                       |   |                           | (6,392,058  | ) |   |   | (6,443,959 | ) |
| Deferred charges                                                             |   |                           | (6,551      | ) |   |   | (1,041 | ) |
|                                                                         |   |                           |        |   |   |   |   |   |
| Net cash used in investing activities                                        |   |                           | (6,398,609  | ) |   |   | (6,445,000 | ) |
|                                                                         |   |                           |        |   |   |   |   |   |
| Cash flows from financing activities:                                        |   |                           |        |   |   |   |   |   |
| Cash dividends paid                                                          |   |                           | (6,702,823  | ) |   |   | (6,894,819 | ) |
| Direct cost of exchange of Class B shares for Class A shares                 |   |                           | -           |   |   |   | (194,053 | ) |
| Loan origination costs                                                       |   |                           | -           |   |   |   | (155,160 | ) |
| Repayment of long-term notes payable                                         |   |                           | (5,000,000  | ) |   |   | - |   |
|                                                                         |   |                           |        |   |   |   |   |   |
| Net cash used in financing activities                                        |   |                           | (11,702,823 | ) |   |   | (7,244,032 | ) |
|                                                                         |   |                           |        |   |   |   |   |   |
| Net increase in cash and cash equivalents                                    |   |                           | 3,175,574   |   |   |   | 5,745,256 |   |
| Cash and cash equivalents, beginning of period                               |   |                           | 13,542,255  |   |   |   | 17,731,044 |   |
|                                                                         |   |                           |        |   |   |   |   |   |
| Cash and cash equivalents, end of period                                     |   | $                              | 16,717,829  |   |   | $ | 23,476,300 |   |
|                                                                         |   |                           |        |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                           |   |                           |        |   |   |   |   |   |
| Interest paid                                                                |   | $                              | 17,767,703  |   |   | $ | 17,345,346 |   |
|                                                                         |   |                           |        |   |   |   |   |   |
| Income taxes paid (received)                                                 |   | $                              | 53,658      |   |   | $ | (197,534 | ) |
|                                                                         |   |                           |        |   |   |   |   |   |

----

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

----

----

|                                                                    |   | Three Months EndedSeptember 30, |       |   | Nine Months EndedSeptember 30, |   |
|-------------------------------------------------------------------------|--------|---------------------------------|------------|--------|--------------------------------|--------|
|                                                                    |   | 2009                            |       |   | 2010                           |   |   | 2009 |   |   | 2010 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |
| Weighted average common shares-basic                                    |   |                            | 12,676,733 |   |                           |   | 13,221,404 |   |   |   | 12,676,733 |   |   |   | 12,906,173 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                           |   |                            | 544,671    |   |                           |   | - |   |   |   | 544,671 |   |   |   | 315,231 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average common shares and potential common shares-diluted |   |                            | 13,221,404 |   |                           |   | 13,221,404 |   |   |   | 13,221,404 |   |   |   | 13,221,404 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders                      |   | $                               | (1,594,614 | )      |                           | $      | 63,075 |   |   | $ | (2,917,948 | ) |   | $ | 94,697 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) per basic share                                       |   | $                               | (0.13      | )      |                           | $      | 0.00 |   |   | $ | (0.23 | ) |   | $ | 0.01 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders                      |   | $                               | (1,594,614 | )      |                           | $      | 63,075 |   |   | $ | (2,917,948 | ) |   | $ | 94,697 |   |
| Less: Change in fair value of B share derivative                        |   |                            | (74,274    | )      |                           |   | - |   |   |   | (148,736 | ) |   |   | - |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available for diluted shares                          |   | $                               | (1,668,888 | )      |                           | $      | 63,075 |   |   | $ | (3,066,684 | ) |   | $ | 94,697 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) per diluted share                                     |   | $                               | (0.13      | )      |                           | $      | 0.00 |   |   | $ | (0.23 | ) |   | $ | 0.01 |   |
|                                                                    |   |                            |       |   |                           |   |   |   |   |   |   |   |   |   |   |   |

|                          |   | September 30, 2010 |       |
|-------------------------------|--------|--------------------|------------|
|                          |   | Fair Value         |       |   | Level 1 (1) |   |   | Level 2 (2) |   |   | Level 3 (3) |   |
| Assets                        |   |               |       |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents     |   | $                  | 23,476,300 |   |   | $ | 23,476,300 |   |   | $ | - |   |   | $ | - |   |
| Co-operative patronage shares |   |               | 1,542,495  |   |   |   | - |   |   |   | - |   |   |   | 1,542,495 |   |
| Total assets                  |   | $                  | 25,018,795 |   |   | $ | 23,476,300 |   |   | $ | - |   |   | $ | 1,542,495 |   |
| Liabilities                   |   |               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps           |   | $                  | 3,014,095  |   |   | $ | - |   |   | $ | 3,014,095 |   |   | $ | - |   |
| Total liabilities             |   | $                  | 3,014,095  |   |   | $ | - |   |   | $ | 3,014,095 |   |   | $ | - |   |

| (1)        Quoted prices in active markets for identical assets.(2)        Significant other observable inputs.(3)        Significant unobservable inputs. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                    |   |   |        |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |         |
|---------------------------------------------------------|--------|--------|-------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|--------------|
|                                                    |   | Parent |        |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |         |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |
| ASSETS                                                  |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |
| Current assets                                          |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |
| Cash and cash equivalents                               |   | $      | -           |   |         | $      | 17,617,266  |          |   | $      | 113,778      |   |   | $            | -            |   |   | $ | 17,731,044 |   |
| Accounts receivable, net                                |   |   | -           |   |         |   | 9,354,246   |          |   |   | 942,587      |   |   |         | -            |   |   |   | 10,296,833 |   |
| Materials and supplies                                  |   |   | -           |   |         |   | 938,766     |          |   |   | 1,031,200    |   |   |         | -            |   |   |   | 1,969,966 |   |
| Prepaid expenses                                        |   |   | 76,219      |   |         |   | 1,192,272   |          |   |   | 73,758       |   |   |         | -            |   |   |   | 1,342,249 |   |
| Income tax receivables                                  |   |   | 389,486     |   |         |   | -           |          |   |   | -            |   |   |         | -            |   |   |   | 389,486 |   |
| Deferred income taxes                                   |   |   | 744,531     |   |         |   | -           |          |   |   | -            |   |   |         | -            |   |   |   | 744,531 |   |
| Investment in subsidiaries                              |   |   | 113,558,790 |   |         |   | -           |          |   |   | -            |   |   |         | (113,558,790 | ) |   |   | - |   |
| Intercompany receivable                                 |   |   | 129,450,605 |   |         |   | -           |          |   |   | -            |   |   |         | (129,450,605 | ) |   |   | - |   |
| Total current assets                                    |   |   | 244,219,631 |   |         |   | 29,102,550  |          |   |   | 2,161,323    |   |   |         | (243,009,395 | ) |   |   | 32,474,109 |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Property and equipment, net                             |   |   | -           |   |         |   | 57,762,888  |          |   |   | 11,266,085   |   |   |         | -            |   |   |   | 69,028,973 |   |
| Goodwill                                                |   |   | -           |   |         |   | 190,126,718 |          |   |   | (1,936,640   | )      |   |         | -            |   |   |   | 188,190,078 |   |
| Intangible assets, net                                  |   |   | -           |   |         |   | 31,361,923  |          |   |   | 2,856,192    |   |   |         | -            |   |   |   | 34,218,115 |   |
| Investments                                             |   |   | 1,000       |   |         |   | 1,661,027   |          |   |   | 329,131      |   |   |         | -            |   |   |   | 1,991,158 |   |
| Deferred income taxes                                   |   |   | 4,482,430   |   |         |   | -           |          |   |   | -            |   |   |         | -            |   |   |   | 4,482,430 |   |
| Other long-term assets                                  |   |   | 7,519,753   |   |         |   | (376,413    | )             |   |   | -            |   |   |         | -            |   |   |   | 7,143,340 |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Total assets                                            |   | $      | 256,222,814 |   |         | $      | 309,638,693 |          |   | $      | 14,676,091   |   |   | $            | (243,009,395 | ) |   | $ | 337,528,203 |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY              |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Current liabilities                                     |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Accounts payable and accrued expenses                   |   | $      | 2,549,577   |   |         | $      | 5,650,086   |          |   | $      | 1,113,088    |   |   | $            | -            |   |   | $ | 9,312,751 |   |
| Intercompany payables                                   |   |   | -           |   |         |   | 123,837,610 |          |   |   | 5,612,995    |   |   |         | (129,450,605 | ) |   |   | - |   |
| Other current liabilities                               |   |   | 394,850     |   |         |   | 1,758,112   |          |   |   | 79,419       |   |   |         | -            |   |   |   | 2,232,381 |   |
| Total current liabilities                               |   |   | 2,944,427   |   |         |   | 131,245,808 |          |   |   | 6,805,502    |   |   |         | (129,450,605 | ) |   |   | 11,545,132 |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Deferred income taxes                                   |   |   | 10,662,374  |   |         |   | 28,184,570  |          |   |   | 3,392,318    |   |   |         | -            |   |   |   | 42,239,262 |   |
| Other liabilities                                       |   |   | 1,592,813   |   |         |   | 864,320     |          |   |   | -            |   |   |         | -            |   |   |   | 2,457,133 |   |
| Long-term notes payable                                 |   |   | 233,453,825 |   |         |   | 40,263,476  |          |   |   | -            |   |   |         | -            |   |   |   | 273,717,301 |   |
| Class B common convertible to senior subordinated notes |   |   | 4,085,033   |   |         |   | -           |          |   |   | -            |   |   |         | -            |   |   |   | 4,085,033 |   |
| Stockholders’ equity                              |   |   | 3,484,342   |   |         |   | 109,080,519 |          |   |   | 4,478,271    |   |   |         | (113,558,790 | ) |   |   | 3,484,342 |   |
|                                                    |   |   |        |   |         |   |        |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Total liabilities and stockholders’ equity        |   | $      | 256,222,814 |   |         | $      | 309,638,693 |          |   | $      | 14,676,091   |   |   | $            | (243,009,395 | ) |   | $ | 337,528,203 |   |

----

|                                                       |   |   |         |   | Guarantor    |   |         | Non-Guarantor |   |   |         |   |   |         |         |
|------------------------------------------------------------|--------|--------|--------------|--------|--------------|--------|--------------|---------------|--------|--------|--------------|--------|--------|--------------|--------------|
|                                                       |   | Parent |         |   | Subsidiaries |   |         | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |         |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |
| ASSETS                                                     |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |
| Current assets                                             |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |
| Cash and cash equivalents                                  |   | $      | -            |   |         | $      | 23,343,686   |          |   | $      | 132,614      |   |   | $            | -            |   |   | $ | 23,476,300 |   |
| Accounts receivable, net                                   |   |   | -            |   |         |   | 10,644,445   |          |   |   | 956,896      |   |   |         | -            |   |   |   | 11,601,341 |   |
| Materials and supplies                                     |   |   | -            |   |         |   | 924,480      |          |   |   | 839,652      |   |   |         | -            |   |   |   | 1,764,132 |   |
| Prepaid expenses and other current assets                  |   |   | 85,291       |   |         |   | 917,980      |          |   |   | 82,389       |   |   |         | -            |   |   |   | 1,085,660 |   |
| Deferred income taxes                                      |   |   | 744,531      |   |         |   | -            |          |   |   | -            |   |   |         | -            |   |   |   | 744,531 |   |
| Investment in subsidiaries                                 |   |   | 133,037,093  |   |         |   | -            |          |   |   | -            |   |   |         | (133,037,093 | ) |   |   | - |   |
| Intercompany receivable                                    |   |   | (126,235,856 | )      |         |   | -            |          |   |   | -            |   |   |         | 126,235,856  |   |   |   | - |   |
| Total current assets                                       |   |   | 7,631,059    |   |         |   | 35,830,591   |          |   |   | 2,011,551    |   |   |         | (6,801,237   | ) |   |   | 38,671,964 |   |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Property and equipment, net                                |   |   | -            |   |         |   | 54,465,658   |          |   |   | 9,695,979    |   |   |         | -            |   |   |   | 64,161,637 |   |
| Goodwill                                                   |   |   | 239,970,317  |   |         |   | (49,843,599  | )             |   |   | (1,936,640   | )      |   |         | -            |   |   |   | 188,190,078 |   |
| Intangible assets, net                                     |   |   | -            |   |         |   | 25,177,731   |          |   |   | 2,669,919    |   |   |         | -            |   |   |   | 27,847,650 |   |
| Investments                                                |   |   | 1,203,605    |   |         |   | 439,290      |          |   |   | 329,131      |   |   |         | -            |   |   |   | 1,972,026 |   |
| Deferred income taxes                                      |   |   | 4,482,430    |   |         |   | -            |          |   |   | -            |   |   |         | -            |   |   |   | 4,482,430 |   |
| Other long-term assets                                     |   |   | 6,099,849    |   |         |   | 152,515      |          |   |   | -            |   |   |         | -            |   |   |   | 6,252,364 |   |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Total assets                                               |   | $      | 259,387,260  |   |         | $      | 66,222,186   |          |   | $      | 12,769,940   |   |   | $            | (6,801,237   | ) |   | $ | 331,578,149 |   |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Current liabilities                                        |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Accounts payable and accrued expenses                      |   | $      | 2,208,607    |   |         | $      | 5,253,950    |          |   | $      | 1,531,712    |   |   | $            | -            |   |   | $ | 8,994,269 |   |
| Intercompany payables                                      |   |   | -            |   |         |   | (127,989,878 | )             |   |   | 1,754,022    |   |   |         | 126,235,856  |   |   |   | - |   |
| Other current liabilities                                  |   |   | 394,850      |   |         |   | 1,713,075    |          |   |   | 105,885      |   |   |         | -            |   |   |   | 2,213,810 |   |
| Total current liabilities                                  |   |   | 2,603,457    |   |         |   | (121,022,853 | )             |   |   | 3,391,619    |   |   |         | 126,235,856  |   |   |   | 11,208,079 |   |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Deferred income taxes                                      |   |   | 19,808,900   |   |         |   | 19,038,044   |          |   |   | 3,392,318    |   |   |         | -            |   |   |   | 42,239,262 |   |
| Other liabilities                                          |   |   | 3,014,095    |   |         |   | 892,429      |          |   |   | -            |   |   |         | -            |   |   |   | 3,906,524 |   |
| Long-term notes payable                                    |   |   | 237,470,638  |   |         |   | 40,263,476   |          |   |   | -            |   |   |         | -            |   |   |   | 277,734,114 |   |
| Stockholders’ equity (deficit)                       |   |   | (3,509,830   | )      |         |   | 127,051,090  |          |   |   | 5,986,003    |   |   |         | (133,037,093 | ) |   |   | (3,509,830 | ) |
|                                                       |   |   |         |   |         |   |         |          |   |   |         |   |   |         |         |   |   |   |   |   |
| Total liabilities and stockholders’ equity (deficit) |   | $      | 259,387,260  |   |         | $      | 66,222,186   |          |   | $      | 12,769,940   |   |   | $            | (6,801,237   | ) |   | $ | 331,578,149 |   |

|                                     |   |   |       |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |       |
|------------------------------------------|--------|--------|------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|------------|
|                                     |   | Parent |       |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |       |
|                                     |   |   |       |   |         |   |        |          |   |   |         |   |   |         |       |
| Revenue                                  |   | $      | 651,922    |   |         | $      | 25,512,149  |          |   | $      | 2,931,113    |   |   | $            | (2,692,050 | ) |   | $ | 26,403,134 |   |
| Operating expenses                       |   |   | (651,922   | )      |         |   | (20,202,597 | )             |   |   | (2,031,594   | )      |   |         | 2,692,050  |   |   |   | (20,194,063 | ) |
| Income from operations                   |   |   | -          |   |         |   | 5,309,552   |          |   |   | 899,519      |   |   |         | -          |   |   |   | 6,209,071 |   |
| Other expense                            |   |   | (7,849,796 | )      |         |   | (98,139     | )             |   |   | (1           | )      |   |         | -          |   |   |   | (7,947,936 | ) |
| Earnings from subsidiaries               |   |   | 6,110,931  |   |         |   | -           |          |   |   | -            |   |   |         | (6,110,931 | ) |   |   | - |   |
| Income (loss) before income tax          |   |   | (1,738,865 | )      |         |   | 5,211,413   |          |   |   | 899,518      |   |   |         | (6,110,931 | ) |   |   | (1,738,865 | ) |
| Income tax benefit                       |   |   | 144,251    |   |         |   | -           |          |   |   | -            |   |   |         | -          |   |   |   | 144,251 |   |
|                                     |   |   |       |   |         |   |        |          |   |   |         |   |   |         |       |   |   |   |   |   |
| Net income (loss) to common stockholders |   | $      | (1,594,614 | )      |         | $      | 5,211,413   |          |   | $      | 899,518      |   |   | $            | (6,110,931 | ) |   | $ | (1,594,614 | ) |

----

|                              |   |   |       |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |       |
|-----------------------------------|--------|--------|------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|------------|
|                              |   | Parent |       |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |       |
|                              |   |   |       |   |         |   |        |          |   |   |         |   |   |         |       |
| Revenue                           |   | $      | 922,701    |   |         | $      | 25,557,714  |          |   | $      | 2,569,589    |   |   | $            | (2,904,777 | ) |   | $ | 26,145,227 |   |
| Operating expenses                |   |   | (922,701   | )      |         |   | (19,202,600 | )             |   |   | (2,196,737   | )      |   |         | 2,904,777  |   |   |   | (19,417,261 | ) |
| Income from operations            |   |   | -          |   |         |   | 6,355,114   |          |   |   | 372,852      |   |   |         | -          |   |   |   | 6,727,966 |   |
| Other income (expense)            |   |   | (6,565,182 | )      |         |   | (62,197     | )             |   |   | 98,579       |   |   |         | -          |   |   |   | (6,528,800 | ) |
| Earnings from subsidiaries        |   |   | 6,764,348  |   |         |   | -           |          |   |   | -            |   |   |         | (6,764,348 | ) |   |   | - |   |
| Income before income tax          |   |   | 199,166    |   |         |   | 6,292,917   |          |   |   | 471,431      |   |   |         | (6,764,348 | ) |   |   | 199,166 |   |
| Income tax expense                |   |   | (136,091   | )      |         |   | -           |          |   |   | -            |   |   |         | -          |   |   |   | (136,091 | ) |
|                              |   |   |       |   |         |   |        |          |   |   |         |   |   |         |       |   |   |   |   |   |
| Net income to common stockholders |   | $      | 63,075     |   |         | $      | 6,292,917   |          |   | $      | 471,431      |   |   | $            | (6,764,348 | ) |   | $ | 63,075 |   |

|                                     |   |   |        |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |        |
|------------------------------------------|--------|--------|-------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|-------------|
|                                     |   | Parent |        |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |        |
|                                     |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |
| Revenue                                  |   | $      | 2,186,352   |   |         | $      | 74,938,358  |          |   | $      | 8,773,453    |   |   | $            | (8,198,182  | ) |   | $ | 77,699,981 |   |
| Operating expenses                       |   |   | (2,186,352  | )      |         |   | (61,065,868 | )             |   |   | (6,255,852   | )      |   |         | 8,198,182   |   |   |   | (61,309,890 | ) |
| Income from operations                   |   |   | -           |   |         |   | 13,872,490  |          |   |   | 2,517,601    |   |   |         | -           |   |   |   | 16,390,091 |   |
| Other income (expense)                   |   |   | (20,105,014 | )      |         |   | (313,157    | )             |   |   | 1,480        |   |   |         | -           |   |   |   | (20,416,691 | ) |
| Earnings from subsidiaries               |   |   | 16,078,414  |   |         |   | -           |          |   |   | -            |   |   |         | (16,078,414 | ) |   |   | - |   |
| Income (loss) before income tax          |   |   | (4,026,600  | )      |         |   | 13,559,333  |          |   |   | 2,519,081    |   |   |         | (16,078,414 | ) |   |   | (4,026,600 | ) |
| Income tax benefit                       |   |   | 1,108,652   |   |         |   | -           |          |   |   | -            |   |   |         | -           |   |   |   | 1,108,652 |   |
|                                     |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| Net income (loss) to common stockholders |   | $      | (2,917,948  | )      |         | $      | 13,559,333  |          |   | $      | 2,519,081    |   |   | $            | (16,078,414 | ) |   | $ | (2,917,948 | ) |

|                              |   |   |        |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |        |
|-----------------------------------|--------|--------|-------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|-------------|
|                              |   | Parent |        |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |        |
|                              |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |
| Revenue                           |   | $      | 2,543,780   |   |         | $      | 76,324,827  |          |   | $      | 8,121,091    |   |   | $            | (8,539,317  | ) |   | $ | 78,450,381 |   |
| Operating expenses                |   |   | (2,543,780  | )      |         |   | (58,125,997 | )             |   |   | (6,711,887   | )      |   |         | 8,539,317   |   |   |   | (58,842,347 | ) |
| Income from operations            |   |   | -           |   |         |   | 18,198,830  |          |   |   | 1,409,204    |   |   |         | -           |   |   |   | 19,608,034 |   |
| Other income (expense)            |   |   | (19,246,771 | )      |         |   | (228,260    | )             |   |   | 98,529       |   |   |         | -           |   |   |   | (19,376,502 | ) |
| Earnings from subsidiaries        |   |   | 19,478,303  |   |         |   | -           |          |   |   | -            |   |   |         | (19,478,303 | ) |   |   | - |   |
| Income before income tax          |   |   | 231,532     |   |         |   | 17,970,570  |          |   |   | 1,507,733    |   |   |         | (19,478,303 | ) |   |   | 231,532 |   |
| Income tax expense                |   |   | (136,835    | )      |         |   | -           |          |   |   | -            |   |   |         | -           |   |   |   | (136,835 | ) |
|                              |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| Net income to common stockholders |   | $      | 94,697      |   |         | $      | 17,970,570  |          |   | $      | 1,507,733    |   |   | $            | (19,478,303 | ) |   | $ | 94,697 |   |

----

|                                           |   |   |        |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |        |
|------------------------------------------------|--------|--------|-------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|-------------|
|                                           |   | Parent |        |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |        |
|                                           |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |
| Cash flows from operating activities:          |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |
| Net income (loss)                              |   | $      | (2,917,948  | )      |         | $      | 13,559,333  |          |   | $      | 2,519,081    |   |   | $            | (16,078,414 | ) |   | $ | (2,917,948 | ) |
| Adjustment to reconcile net income (loss)      |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| to cash flows from operating activities        |   |   | 2,431,151   |   |         |   | 18,803,471  |          |   |   | 2,365,032    |   |   |         | -           |   |   |   | 23,599,654 |   |
| Changes in assets and liabilities, net of      |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| assets and liabilities acquired                |   |   | 28,268,034  |   |         |   | (23,946,905 | )             |   |   | (3,725,829   | )      |   |         | -           |   |   |   | 595,300 |   |
| Net cash provided by operating activities      |   |   | 27,781,237  |   |         |   | 8,415,899   |          |   |   | 1,158,284    |   |   |         | (16,078,414 | ) |   |   | 21,277,006 |   |
| Cash flows used in investing activities        |   |   | -           |   |         |   | (5,339,203  | )             |   |   | (1,059,406   | )      |   |         | -           |   |   |   | (6,398,609 | ) |
| Cash flows used in financing activities        |   |   | (27,781,237 | )      |         |   | -           |          |   |   | -            |   |   |         | 16,078,414  |   |   |   | (11,702,823 | ) |
| Net increase in cash and cash equivalents      |   |   | -           |   |         |   | 3,076,696   |          |   |   | 98,878       |   |   |         | -           |   |   |   | 3,175,574 |   |
|                                           |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| Cash and cash equivalents, beginning of period |   |   | -           |   |         |   | 13,521,138  |          |   |   | 21,117       |   |   |         | -           |   |   |   | 13,542,255 |   |
|                                           |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| Cash and cash equivalents, end of period       |   | $      | -           |   |         | $      | 16,597,834  |          |   | $      | 119,995      |   |   | $            | -           |   |   | $ | 16,717,829 |   |

|                                           |   |   |        |   | Guarantor    |   |        | Non-Guarantor |   |   |         |   |   |         |        |
|------------------------------------------------|--------|--------|-------------|--------|--------------|--------|-------------|---------------|--------|--------|--------------|--------|--------|--------------|-------------|
|                                           |   | Parent |        |   | Subsidiaries |   |        | Subsidiaries  |   |   | Eliminations |   |   | Consolidated |        |
|                                           |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |
| Cash flows from operating activities:          |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |
| Net income                                     |   | $      | 94,697      |   |         | $      | 17,970,570  |          |   | $      | 1,507,733    |   |   | $            | (19,478,303 | ) |   | $ | 94,697 |   |
| Adjustment to reconcile net income             |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| to cash flows from operating activities        |   |   | 2,372,388   |   |         |   | 15,397,870  |          |   |   | 2,474,664    |   |   |         | -           |   |   |   | 20,244,922 |   |
| Changes in assets and liabilities, net of      |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| assets and liabilities acquired                |   |   | 24,255,251  |   |         |   | (21,849,526 | )             |   |   | (3,311,056   | )      |   |         | -           |   |   |   | (905,331 | ) |
| Net cash provided by operating activities      |   |   | 26,722,336  |   |         |   | 11,518,914  |          |   |   | 671,341      |   |   |         | (19,478,303 | ) |   |   | 19,434,288 |   |
| Cash flows used in investing activities        |   |   | -           |   |         |   | (5,792,495  | )             |   |   | (652,505     | )      |   |         | -           |   |   |   | (6,445,000 | ) |
| Cash flows used in financing activities        |   |   | (26,722,336 | )      |         |   | 1           |          |   |   | -            |   |   |         | 19,478,303  |   |   |   | (7,244,032 | ) |
| Net increase in cash and cash equivalents      |   |   | -           |   |         |   | 5,726,420   |          |   |   | 18,836       |   |   |         | -           |   |   |   | 5,745,256 |   |
|                                           |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| Cash and cash equivalents, beginning of period |   |   | -           |   |         |   | 17,617,266  |          |   |   | 113,778      |   |   |         | -           |   |   |   | 17,731,044 |   |
|                                           |   |   |        |   |         |   |        |          |   |   |         |   |   |         |        |   |   |   |   |   |
| Cash and cash equivalents, end of period       |   | $      | -           |   |         | $      | 23,343,686  |          |   | $      | 132,614      |   |   | $            | -           |   |   | $ | 23,476,300 |   |

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

|   | ● | Local services.  We receive revenues from providing local exchange telecommunications services in our ten rural territories, from the wholesale network services in New England, and on a competitive basis throughout Maine and New Hampshire. These revenues include monthly subscription charges for basic service, calling beyond the local territory on a fixed price and on a per minute basis, local private line services and enhanced calling features, such as voicemail, caller identification, call waiting and call forwarding. We also provide billing and collections services for other carriers under contract and receive revenues from directory advertising. A growing portion of our rural subscribers take bundled service plans which include multiple services, including unlimited domestic calling, for a flat monthly fee. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Network access.  We receive revenues from charges established to compensate us for the origination, transport and termination of calls of long distance and other interexchange carriers. These include subscriber line charges imposed on end users and switched and special access charges paid by carriers. Switched access charges for long distance services within Alabama, Maine, Massachusetts, Missouri, New Hampshire and West Virginia are based on rates approved by the Alabama Public Service Commission, the Maine Public Utilities Commission (“MPUC”), the Massachusetts Department of Telecommunications and Cable, the Missouri Public Service Commission, the New Hampshire Public Utilities Commission (“NHPUC”) and the West Virginia Public Service Commission, respectively, where appropriate. Switched and special access charges for interstate and international services are based on rates approved by the Federal Communications Commission. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Cable television.  We offer basic, digital, high-definition, digital video recording and pay per view cable television services to a portion of our telephone service territory in both Alabama and Missouri, including Internet Protocol television (“IPTV”) and Video on Demand in Alabama.  We are a reseller of satellite services for DirecTV. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Internet.  We receive revenues from monthly recurring charges for digital high-speed data lines, dial-up internet access and ancillary services such as web hosting and computer virus protection. |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Transport services.  We receive monthly recurring revenues for the rental of fiber to transport data and other telecommunications services in Maine. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                              |   | At and For the |    |   | At and For the     |   |    | % Change |   |
|-----------------------------------|--------|----------------|---------|--------|--------------------|--------|---------|----------|--------|
|                              |   | Year Ended     |    |   | Three Months Ended |   |    | June 30- |   |
|                              |   | December 31,   |    |   | March 31,          |   |    | June 31, |   |   | September 30, |   |   | September 30, |   |
|                              |   | 2008           |    |   | 2009               |   |    | 2010     |   |   | 2010 |   |   | 2010 |   |   | 2010 |   |
| Otelco access line equivalents(1) |   |           | 100,043 |   |               |   | 100,356 |     |   |   | 100,522 |   |   |   | 100,126 |   |   |   | 100,872 |   |   |   | 0.7 |  % |
| RLEC and other services:          |   |           |    |   |               |   |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Voice access lines                |   |           | 51,530  |   |               |   | 48,215  |     |   |   | 47,552 |   |   |   | 46,788 |   |   |   | 46,359 |   |   |   | (0.9 | )% |
| Data access lines                 |   |           | 18,709  |   |               |   | 20,066  |     |   |   | 20,614 |   |   |   | 20,703 |   |   |   | 20,890 |   |   |   | 0.9 |  % |
| Access line equivalents(1)        |   |           | 70,239  |   |               |   | 68,281  |     |   |   | 68,166 |   |   |   | 67,491 |   |   |   | 67,249 |   |   |   | (0.4 | )% |
| Cable television customers        |   |           | 4,082   |   |               |   | 4,195   |     |   |   | 4,239 |   |   |   | 4,205 |   |   |   | 4,248 |   |   |   | 1.0 |  % |
| Additional internet customers     |   |           | 11,864  |   |               |   | 9,116   |     |   |   | 8,528 |   |   |   | 8,048 |   |   |   | 7,483 |   |   |   | (7.0 | )% |
| RLEC dial-up                      |   |           | 1,183   |   |               |   | 786     |     |   |   | 656 |   |   |   | 551 |   |   |   | 447 |   |   |   | (18.9 | )% |
| Other dial-up                     |   |           | 9,213   |   |               |   | 6,439   |     |   |   | 5,765 |   |   |   | 5,340 |   |   |   | 4,804 |   |   |   | (10.0 | )% |
| Other data lines                  |   |           | 1,468   |   |               |   | 1,891   |     |   |   | 2,107 |   |   |   | 2,157 |   |   |   | 2,232 |   |   |   | 3.5 |  % |
| Revenues (dollars in millions)    |   | $              | 54.4    |   |               | $      | 61.3    |     |   | $ | 14.7 |   |   | $ | 14.4 |   |   | $ | 14.5 |   |   |   | 0.7 |  % |
|                              |   |           |    |   |               |   |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CLEC:                             |   |           |    |   |               |   |    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Voice access lines                |   |           | 26,558  |   |               |   | 28,647  |     |   |   | 28,889 |   |   |   | 29,070 |   |   |   | 30,118 |   |   |   | 3.6 |  % |
| Data access lines                 |   |           | 3,246   |   |               |   | 3,428   |     |   |   | 3,467 |   |   |   | 3,565 |   |   |   | 3,505 |   |   |   | (1.7 | )% |
| Access line equivalents(1)        |   |           | 29,804  |   |               |   | 32,075  |     |   |   | 32,356 |   |   |   | 32,635 |   |   |   | 33,623 |   |   |   | 3.0 |  % |
| Wholesale network connections     |   |           | 98,187  |   |               |   | 132,324 |     |   |   | 137,318 |   |   |   | 142,837 |   |   |   | 145,300 |   |   |   | 1.7 |  % |
| Revenues (dollars in millions)    |   | $              | 22.7    |   |               | $      | 42.5    |     |   | $ | 11.1 |   |   | $ | 12.1 |   |   | $ | 11.6 |   |   |   | (4.1 | )% |

----

| (1) We define access line equivalents as voice access lines and data access lines (including cable modems, digital subscriber lines, and dedicated data access trunks). |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                               |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|----------------------------------------------------|--------|----------------------------------|--------|--------|---------------------------------|--------|
|                                               |   | 2009                             |   |   | 2010                            |   |   | 2009 |   |   | 2010 |   |
| Revenues                                           |   |                             |   |   |                            |   |   |   |   |   |   |   |
| Local services                                     |   |                             | 47.0   | %      |                            |   | 47.5 | % |   |   | 46.7 | % |   |   | 47.1 | % |
| Network access                                     |   |                             | 32.2   |   |                            |   | 30.9 |   |   |   | 32.0 |   |   |   | 31.4 |   |
| Cable television                                   |   |                             | 2.3    |   |                            |   | 2.7 |   |   |   | 2.4 |   |   |   | 2.7 |   |
| Internet                                           |   |                             | 13.3   |   |                            |   | 13.5 |   |   |   | 13.6 |   |   |   | 13.5 |   |
| Transport services                                 |   |                             | 5.2    |   |                            |   | 5.4 |   |   |   | 5.3 |   |   |   | 5.3 |   |
| Total revenues                                     |   |                             | 100.0  | %      |                            |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |
| Operating expenses                                 |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services and products                      |   |                             | 39.6   | %      |                            |   | 39.5 | % |   |   | 40.2 | % |   |   | 40.0 | % |
| Selling, general and administrative expenses       |   |                             | 12.2   |   |                            |   | 12.7 |   |   |   | 13.1 |   |   |   | 12.5 |   |
| Depreciation and amortization                      |   |                             | 24.7   |   |                            |   | 22.1 |   |   |   | 25.6 |   |   |   | 22.5 |   |
| Total operating expenses                           |   |                             | 76.5   |   |                            |   | 74.3 |   |   |   | 78.9 |   |   |   | 75.0 |   |
|                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Income from operations                             |   |                             | 23.5   |   |                            |   | 25.7 |   |   |   | 21.1 |   |   |   | 25.0 |   |
|                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense)                             |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                   |   |                             | (24.5  | )      |                            |   | (24.2 | ) |   |   | (25.1 | ) |   |   | (23.6 | ) |
| Change in fair value of derivatives                |   |                             | (5.7   | )      |                            |   | (1.4 | ) |   |   | (1.5 | ) |   |   | (1.8 | ) |
| Other income                                       |   |                             | 0.1    |   |                            |   | 0.6 |   |   |   | 0.3 |   |   |   | 0.7 |   |
| Total other expenses                               |   |                             | (30.1  | )      |                            |   | (25.0 | ) |   |   | (26.3 | ) |   |   | (24.7 | ) |
|                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income tax                    |   |                             | (6.6   | )      |                            |   | 0.7 |   |   |   | (5.2 | ) |   |   | 0.3 |   |
|                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Income tax benefit (expense)                       |   |                             | 0.6    |   |                            |   | (0.5 | ) |   |   | 1.4 |   |   |   | (0.2 | ) |
|                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common stockholders |   |                             | (6.0   | )%     |                            |   | 0.2 | % |   |   | (3.8 | )% |   |   | 0.1 | % |
|                                               |   |                             |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |

|               |   | Three Months EndedSeptember 30, |   |   | Change |   |
|--------------------|--------|---------------------------------|--------|--------|--------|--------|
|               |   | 2009                            |   |   | 2010   |   |   | Amount |   |   | Percent |   |
|               |   | (dollars in thousands)          |   |
| Local services     |   | $                               | 12,397 |   |   | $      | 12,423 |   |   | $ | 26 |   |   |   | 0.2 | % |
| Network access     |   |                            | 8,517  |   |   |   | 8,077 |   |   |   | (440 | ) |   |   | (5.2 | ) |
| Cable television   |   |                            | 614    |   |   |   | 717 |   |   |   | 103 |   |   |   | 16.8 |   |
| Internet           |   |                            | 3,501  |   |   |   | 3,521 |   |   |   | 20 |   |   |   | 0.6 |   |
| Transport services |   |                            | 1,374  |   |   |   | 1,407 |   |   |   | 33 |   |   |   | 2.4 |   |
| Total              |   | $                               | 26,403 |   |   | $      | 26,145 |   |   | $ | (258 | ) |   |   | (1.0 | ) |

----

|               |   | Nine Months EndedSeptember 30, |   |   | Change |   |
|--------------------|--------|--------------------------------|--------|--------|--------|--------|
|               |   | 2009                           |   |   | 2010   |   |   | Amount |   |   | Percent |   |
|               |   | (dollars in thousands)         |   |
| Local services     |   | $                              | 36,315 |   |   | $      | 36,948 |   |   | $ | 633 |   |   |   | 1.7 | % |
| Network access     |   |                           | 24,877 |   |   |   | 24,666 |   |   |   | (211 | ) |   |   | (0.8 | ) |
| Cable television   |   |                           | 1,833  |   |   |   | 2,082 |   |   |   | 249 |   |   |   | 13.6 |   |
| Internet           |   |                           | 10,543 |   |   |   | 10,559 |   |   |   | 16 |   |   |   | 0.2 |   |
| Transport services |   |                           | 4,132  |   |   |   | 4,195 |   |   |   | 63 |   |   |   | 1.5 |   |
| Total              |   | $                              | 77,700 |   |   | $      | 78,450 |   |   | $ | 750 |   |   |   | 1.0 |   |

----

|                                         |   | Three Months EndedSeptember 30, |   |   | Change |   |
|----------------------------------------------|--------|---------------------------------|--------|--------|--------|--------|
|                                         |   | 2009                            |   |   | 2010   |   |   | Amount |   |   | Percent |   |
|                                         |   | (dollars in thousands)          |   |
| Cost of services and products                |   | $                               | 10,445 |   |   | $      | 10,336 |   |   | $ | (109 | ) |   |   | (1.0 | )% |
| Selling, general and administrative expenses |   |                            | 3,223  |   |   |   | 3,308 |   |   |   | 85 |   |   |   | 2.6 |   |
| Depreciation and amortization                |   |                            | 6,526  |   |   |   | 5,773 |   |   |   | (753 | ) |   |   | (11.5 | ) |
| Total                                        |   | $                               | 20,194 |   |   | $      | 19,417 |   |   | $ | (777 | ) |   |   | (3.8 | ) |

|                                         |   | Nine Months EndedSeptember 30, |   |   | Change |   |
|----------------------------------------------|--------|--------------------------------|--------|--------|--------|--------|
|                                         |   | 2009                           |   |   | 2010   |   |   | Amount |   |   | Percent |   |
|                                         |   | (dollars in thousands)         |   |
| Cost of services and products                |   | $                              | 31,245 |   |   | $      | 31,374 |   |   | $ | 129 |   |   |   | 0.4 | % |
| Selling, general and administrative expenses |   |                           | 10,142 |   |   |   | 9,775 |   |   |   | (367 | ) |   |   | (3.6 | ) |
| Depreciation and amortization                |   |                           | 19,923 |   |   |   | 17,693 |   |   |   | (2,230 | ) |   |   | (11.2 | ) |
| Total                                        |   | $                              | 61,310 |   |   | $      | 58,842 |   |   | $ | (2,468 | ) |   |   | (4.0 | ) |

----

|                                |   | Three Months EndedSeptember 30, |   |   | Change |   |
|-------------------------------------|--------|---------------------------------|--------|--------|--------|--------|
|                                |   | 2009                            |   |   | 2010   |   |   | Amount |   |   | Percent |   |
|                                |   | (dollars in thousands)          |   |
| Interest expense                    |   | $                               | (6,469 | )      |   | $      | (6,321 | ) |   | $ | (148 | ) |   |   | (2.3 | )% |
| Change in fair value of derivatives |   |                            | (1,509 | )      |   |   | (359 | ) |   |   | 1,150 |   |   | NM |   |
| Other income                        |   |                            | 30     |   |   |   | 151 |   |   |   | 121 |   |   |   | 403.3 |   |
| Income tax (expense) benefit        |   |                            | 144    |   |   |   | (136 | ) |   |   | (280 | ) |   |   | (194.4 | ) |

|                                |   | Nine Months EndedSeptember 30, |    |   | Change |   |
|-------------------------------------|--------|--------------------------------|---------|--------|--------|--------|
|                                |   | 2009                           |    |   | 2010   |   |   | Amount |   |   | Percent |   |
|                                |   | (dollars in thousands)         |    |
| Interest expense                    |   | $                              | (19,515 | )      |   | $      | (18,489 | ) |   | $ | (1,026 | ) |   |   | (5.3 | )% |
| Change in fair value of derivatives |   |                           | (1,170  | )      |   |   | (1,421 | ) |   |   | (251 | ) |   | NM |   |
| Other income                        |   |                           | 268     |   |   |   | 534 |   |   |   | 266 |   |   |   | 99.3 |   |
| Income tax (expense) benefit        |   |                           | 1,109   |   |   |   | (137 | ) |   |   | (1,246 | ) |   |   | (112.4 | ) |

----

----

|                                                                         |   | Nine Months EndedSeptember 30, |   |
|------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                         |   | 2009                           |   |   | 2010 |   |
|                                                                         |   | (dollars in thousands)         |   |
| Cash generation                                                              |   |                           |   |   |   |   |
| Revenues                                                                     |   | $                              | 77,700 |   |   | $ | 78,450 |   |
| Other income                                                                 |   |                           | 268    |   |   |   | 534 |   |
| Cash received from operations                                                |   |                           | 77,968 |   |   |   | 78,984 |   |
| Cost of services and products                                                |   |                           | 31,245 |   |   |   | 31,374 |   |
| Selling, general and administrative expenses                                 |   |                           | 10,142 |   |   |   | 9,775 |   |
| Cash consumed by operations                                                  |   |                           | 41,387 |   |   |   | 41,149 |   |
| Cash generated from operations                                               |   | $                              | 36,581 |   |   | $ | 37,835 |   |
|                                                                         |   |                           |   |   |   |   |   |   |
| Cash utilization                                                             |   |                           |   |   |   |   |   |   |
| Capital investment in operations                                             |   | $                              | 6,392  |   |   | $ | 6,444 |   |
| Senior debt interest and fees                                                |   |                           | 10,099 |   |   |   | 10,264 |   |
| Interest on senior subordinated notes                                        |   |                           | 7,351  |   |   |   | 7,331 |   |
| Dividends                                                                    |   |                           | 6,703  |   |   |   | 6,895 |   |
| Cash utilized by the Company                                                 |   | $                              | 30,545 |   |   | $ | 30,934 |   |
|                                                                         |   |                           |   |   |   |   |   |   |
| Percentage of cash utilized by the Company of cash generated from operations |   |                           | 83.6   | % |   |   | 81.8 | % |

----

| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
|---------|------------------------------------------------------------|

| Item 4. | Controls and Procedures |
|---------|-------------------------|

----

PART II  OTHER INFORMATION

| Item 6. | Exhibits |
|---------|----------|

----

| Date:  November 4, 2010 | OTELCO INC. |                      |
|-----------------------------------|-------------|---------------------------|
|                              |        |                      |   |
|                              | By:         | /s/ Curtis L. Garner, Jr. |   |
|                              |        | Curtis L. Garner, Jr.     |   |
|                              |        | Chief Financial Officer   |   |
|                              |        |                      |   |

----

| Exhibit No. |   | Description                                                                                                                                          |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                 |
| 31.1        |   | Certificate pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934 of the Chief Executive Officer                    |
|        |   |                                                                                                                                                 |
| 31.2        |   | Certificate pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934 of the Chief Financial Officer                    |
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| 32.1        |   | Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Executive Officer |
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| 32.2        |   | Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of the Chief Financial Officer |