Delaware
|
3570
|
87-0419571
|
(State
or Other Jurisdiction of Incorporation
|
(Primary
Standard Industrial
|
(I.R.S.
Employer Identification No.)
|
or
Organization)
|
Classification
Code Number)
|
|
6701
Democracy Blvd.
|
Jay
O. Wright, Chief Executive Officer
|
|
Bethesda,
MD 20817
|
Mobilepro
Corp.
|
|
(301)
315-9040
|
6701
Democracy Blvd.
|
|
(Address
and Telephone Number of Principal
|
Bethesda,
MD 20817
|
|
Executive
Offices and Principal Place of Business)
|
(301)
315-9040
|
|
(Name,
Address and Telephone Number of Agent for
Service)
|
Copy
to:
Ernest
M. Stern, Esq.
Schiff
Hardin LLP
1101
Connecticut Avenue, N.W., Suite 600
Washington,
D.C. 20036
(202)
778-6400
Fax
No.: (202) 778-6460
|
CALCULATION
OF REGISTRATION
FEE
|
|||||
Title
Of Each Class Of
Securities
To Be Registered
|
Amount
To Be
Registered
|
Proposed
Maximum Offering
Price
Per
Share (1)
|
Proposed
Maximum Aggregate
Offering
Price
(1)
|
Amount
Of
Registration
Fee
|
|
Common
stock, par value $0.001 per share
|
123,732,939
|
Shares
|
$0.262
|
$32,418,030
|
$3,815.60
|
(1)
|
Estimated
solely for the purpose of calculating the registration fee pursuant
to
Rule 457(c) under the Securities Act of 1933. For
the purposes
of this table, we have used the closing price of our common stock
on
September 27,
2005.
|
· |
The
holder of 10,000,000 shares of common stock that were issued
to the former
owner in connection with our acquisition of American Fiber Network,
Inc.
|
· |
The
holder of 2,200,000 shares of our common stock that were issued
to the
former owner in connection with our acquisition of Clover Computer
Corporation.
|
· |
Certain
holders of 1,846,733 shares
of our common stock that were issued to the former stockholders
upon the
conversion of convertible promissory notes obtained in connection
with the
acquisition of The River Internet Access
Co.
|
· |
Cornell
Capital Partners, L.P. that owns 4,995,000 shares of our common
stock
acquired in connection with the negotiation of the $100 million
Standby
Equity Distribution Agreement, and that holds a debenture that
is
convertible into 51,666,667 shares of our common stock and a
warrant to
purchase up to 6,000,000 shares of our common
stock.
|
· |
Certain
holders of warrants to purchase collectively up to 5,600,000
shares of our
common stock that were issued in connection with the bridge financing
of
our acquisition of Davel Communications,
Inc.
|
· |
Certain
holders of warrants to purchase collectively up to 5,000,000
shares of our
common stock that were issued to the former owners in connection
with our
acquisition of Davel Communications, Inc.
|
· |
Certain
holders of warrants to purchase collectively up to 2,874,539
shares of our
common stock that were issued to the former owners in connection
with our
acquisition of CloseCall America,
Inc.
|
· |
The
holder of a warrant to purchase up to 600,000 shares of our common
stock
that were issued to a former owner in connection with our acquisition
of
Evergreen Open Broadband
Corporation.
|
· |
Certain
holders of warrants to purchase an aggregate
of 32,950,000
shares of our common stock that were issued to current and former
employees, consultants, advisors and
directors.
|
|
1 |
THE
OFFERING
|
2 |
SUMMARY
FINANCIAL INFORMATION
|
3 |
RISK
FACTORS
|
4 |
SELLING
STOCKHOLDERS
|
12 |
FORWARD-LOOKING
STATEMENTS
|
15 |
DESCRIPTION
OF BUSINESS
|
15 |
DESCRIPTION
OF PROPERTY
|
37 |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
38 |
MANAGEMENT
|
45 |
LEGAL
PROCEEDINGS
|
52 |
PRINCIPAL
STOCKHOLDERS
|
54 |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
55 |
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS
|
56 |
DESCRIPTION
OF SECURITIES
|
57 |
EXPERTS
|
58 |
LEGAL
MATTERS
|
58 |
AVAILABLE
INFORMATION
|
58 |
FINANCIAL
STATEMENTS
|
F-1
|
Technology
|
Our
wireless technology development efforts are conducted by our wholly-owned
subsidiary, NeoReach, Inc., and its subsidiary NeoReach Wireless,
Inc.
(“NeoReach Wireless”). NeoReach, Inc. is focused on our ongoing ZigBee
chip development work while NeoReach Wireless is focused on our
strategic
initiatives within the Wi-Fi / Wi-Max space.
|
Voice Services
|
Our
voice services segment is led by CloseCall America, Inc. (“CloseCall”), a
Competitive Local Exchange Carrier (“CLEC”) based in Stevensville,
Maryland; American Fiber Network, Inc. (“AFN”), a CLEC based in Kansas
City, Kansas; and Davel Communications, Inc. (“Davel”), an independent
payphone provider based in Cleveland, Ohio. CloseCall offers our
customers
a full array of telecommunications products and services including
local,
long-distance, 1.800CloseCall anytime/anywhere calling, digital
wireless,
high-speed telephone (voice over IP), and dial-up and DSL Internet
services. AFN is licensed to provide local telephone, long distance
and
Internet services in the forty-eight (48) states. Davel owns and
operates
approximately 38,000 payphones in 45 states and is one of the largest
independent payphone operators in the United States.
|
Internet Services
|
Our
internet services segment is led by DFW Internet Services, Inc.
(“DFW”,
doing business as Nationwide Internet), an Internet services provider
based in Irving, Texas, and its acquired Internet service provider
subsidiaries. Our Internet services segment provides broadband
and dial-up
internet access, web-hosting services and related Internet services
to
business and residential customers in over 40
states.
|
· |
The
holder of 10,000,000 shares of common stock that were issued to
the former
owner in connection with our acquisition of American Fiber Network,
Inc.
|
· |
The
holder of 2,200,000 shares of our common stock that were issued
to the
former owner in connection with our acquisition of Clover Computer
Corporation.
|
· |
Certain
holders of 1,846,733 shares
of our common stock that were issued to the former stockholders
upon the
conversion of convertible promissory notes obtained in connection
with the
acquisition of The River Internet Access
Co.
|
· |
Cornell
Capital Partners, L.P. that owns 4,995,000 shares of our common
stock
acquired in connection with the negotiation of the $100 million
Standby
Equity Distribution Agreement, and that holds a debenture that
is
convertible into 51,666,667 shares of our common stock and a warrant
to
purchase up to 6,000,000 shares of our common
stock.
|
· |
Certain
holders of warrants to purchase collectively up to 5,600,000 shares
of our
common stock that were issued in connection with the bridge financing
of
our acquisition of Davel Communications,
Inc.
|
· |
Certain
holders of warrants to purchase collectively up to 5,000,000 shares
of our
common stock that were issued to the former owners in connection
with our
acquisition of Davel Communications, Inc.
|
· |
Certain
holders of warrants to purchase collectively up to 2,874,539 shares
of our
common stock that were issued to the former owners in connection
with our
acquisition of CloseCall America,
Inc.
|
· |
The
holder of a warrant to purchase up to 600,000 shares of our common
stock
that were issued to a former owner in connection with our acquisition
of
Evergreen Open Broadband
Corporation.
|
· |
Certain
holders of warrants to purchase an aggregate
of 32,950,000
shares of our common stock that were issued to current and former
employees, consultants, advisors and
directors.
|
Common
Stock Offered
|
123,732,939
shares of our common stock by selling stockholders (the number
of shares
being registered in this offering will represent approximately
24.99%
of the total number of shares of common stock outstanding upon
their
issuance).
|
Offering
Price
|
Market
price.
|
Common
Stock Outstanding Before the Offering
|
388,978,011
shares.
|
Use
of Proceeds
|
We
will not receive any proceeds of the shares offered by the selling
stockholders.
|
Risk
Factors
|
The
securities offered hereby involve a high degree of risk and immediate
substantial dilution. See “Risk Factors”.
|
Over-the-Counter
Bulletin Board Symbol
|
MOBL
|
For
the
Year
Ended
March
31, 2004
|
For
the
Year
Ended
March
31, 2005
|
For
the Three
Months Ended June 30, 2004 |
For
the Three
Months Ended June 30, 2005 |
||||||||||
Statement
of Operations Data:
|
|||||||||||||
|
|||||||||||||
Revenues
|
$
|
311,355
|
$
|
46,508,144
|
$
|
1,170,164
|
$
|
22,505,845
|
|||||
|
|||||||||||||
Cost
of Revenues
|
117,349
|
22,551,240
|
357,939
|
11,021,862
|
|||||||||
|
|||||||||||||
Gross
Profit
|
194,006
|
23,956,904
|
812,225
|
11,483,983
|
|||||||||
|
|||||||||||||
Total
Operating Expenses
|
1,977,158
|
27,478,063
|
1,267,198
|
10,132,617
|
|||||||||
|
|||||||||||||
Income
(Loss) Before Other Income (Expense)
|
(1,783,152
|
)
|
(3,521,159
|
)
|
(454,973
|
)
|
1,351,366
|
|
|||||
|
|||||||||||||
Total
Other Income (Expenses)
|
(374,692
|
)
|
(1,838,563
|
)
|
(302,466
|
)
|
(932,175
|
)
|
|||||
|
|||||||||||||
Net
Income (Loss) Applicable to Common Shares
|
$
|
(2,157,844
|
)
|
$
|
(5,359,722
|
)
|
$
|
(757,439
|
)
|
$
|
419,191
|
|
|
|
|||||||||||||
Net
Income (Loss) Per Share
|
|||||||||||||
Basic
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0033
|
)
|
$
|
0.0012
|
||
|
|||||||||||||
Diluted
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0033
|
)
|
$
|
0.0010
|
|
March
31,
2004
|
March
31,
2005
|
June
30,
2005
|
|||||||
Balance
Sheet Data:
|
||||||||||
|
||||||||||
Assets
|
||||||||||
Cash
and Cash Equivalents
|
$
|
1,955,607
|
$
|
4,669,787
|
$
|
4,988,956
|
||||
|
||||||||||
Total
Current Assets
|
2,106,143
|
20,269,751
|
20,955,335
|
|||||||
|
||||||||||
Total
Non-Current Assets
|
1,252,030
|
52,553,180
|
64,247,443
|
|||||||
|
||||||||||
Total
Assets
|
$
|
3,358,173
|
$
|
72,822,931
|
$
|
85,202,778
|
||||
|
||||||||||
Liabilities
|
||||||||||
Total
Current Liabilities
|
$
|
2,511,654
|
$
|
48,869,082
|
$
|
36,816,299
|
||||
|
||||||||||
Total
Long-Term Liabilities
|
560,200
|
999,196
|
14,359,091
|
|||||||
|
||||||||||
Total
Liabilities
|
3,071,854
|
49,868,278
|
51,175,390
|
|||||||
|
||||||||||
Minority
Interest
|
–
|
600,000
|
3,675,000
|
|||||||
|
||||||||||
Total
Stockholders’ Equity
|
286,319
|
22,354,653
|
30,352,388
|
|||||||
|
||||||||||
Total
Liabilities and Stockholders’ Equity
|
$
|
3,358,173
|
$
|
72,822,931
|
$
|
85,202,778
|
•
|
our success in withstanding the continued shift from dial-up ISP service to broadband ISP service; | |||
•
|
the
performance of our products, services and technology in a manner
that
meets customer expectations;
|
|||
|
||||
•
|
the
success of our efforts to develop effective channels of distribution
for
our products;
|
|||
|
||||
•
|
our
ability to price our products that are of a quality and at a price
point
that is competitive with similar or comparable products offered
by our
competitors;
|
|||
|
||||
•
|
the
success of our efforts to develop, improve and satisfactorily address
any
issues relating to our technology;
|
|||
|
||||
•
|
our
ability to effectively compete with companies that have substantially
greater market presence and financial, technical, marketing and
other
resources than us including (i) local ISPs, (ii) national
and
regional ISPs, (iii) established online services; (iv) nonprofit
or educational ISPs; (v) national telecommunications companies;
(vi) Regional Bell Operating Companies (“RBOCs”);
(vii) competitive local exchange carriers; and (viii) cable
operators;
|
|||
|
||||
•
|
our
ability to adapt to the consolidation of existing ISPs with or
into larger
entities, or entry of new entities into the Internet services market,
would likely result in greater competition for the
Company;
|
|||
•
|
our ability to collect dial around compensation owed to our pay telephone business from third party payors; and | |||
•
|
the continued erosion of coin revenues in our pay telephone business resulting from the penetration of wireless technologies and prepaid calling cards. |
•
|
|
Difficulties
in integrating the operations, technologies, products and personnel
of the
acquired companies;
|
||
•
|
|
Diversion
of management’s attention from normal daily operations of the
business;
|
||
•
|
|
Difficulties
in entering markets in which we have no or limited direct prior
experience
and where competitors in such markets have stronger market
positions;
|
||
•
|
|
Initial
dependence on unfamiliar partners;
|
||
•
|
|
Insufficient
revenues to offset increased expenses associated with acquisitions;
and
|
||
•
|
|
The
potential loss of key employees of the acquired
companies.
|
•
|
|
Issue
common stock that would dilute our current stockholders’ percentage
ownership;
|
||
•
|
|
Assume
liabilities;
|
||
•
|
|
Record
goodwill and non-amortizable intangible assets that will be subject
to
impairment testing on a regular basis and potential periodic impairment
charges;
|
||
•
|
|
Incur
amortization expenses related to certain intangible
assets;
|
||
•
|
|
Incur
large and immediate write-offs, and restructuring and other related
expenses; or
|
||
•
|
|
Become
subject to litigation.
|
•
|
It
is traded at a price of less than $5.00 per share;
|
|||
•
|
It
is not traded on a “recognized” national exchange;
|
|||
|
||||
•
|
Its
price is not quoted on the Nasdaq automated quotation system
(Nasdaq-listed stock must still have a price of not less than
$5.00 per
share); or
|
|||
|
||||
•
|
Its
issuer has net tangible assets less than $2.0 million
(if the issuer
has been in continuous operation for at least three years) or
$5.0 million (if in continuous operation for less than
three years),
or has average annual revenues of less than $6.0 million
for the last
three years.
|
Selling
Stockholder
|
Shares
Beneficially Owned Before Offering
|
Percentage
of Outstanding Shares Beneficially Owned Before Offering
(1)
|
Shares
to be Sold
in
the Offering
|
Percentage
of Outstanding Shares Beneficially Owned After Offering
(1)
|
|||||||||
The
Bethell Family Trust (2)
|
10,000,000
|
2.57
|
%
|
10,000,000
|
0.00
|
%
|
|||||||
Paul
Sadler (3)
|
2,200,000
|
0.57
|
%
|
2,200,000
|
0.00
|
%
|
|||||||
Marcus
Needham
|
139,057
|
0.04
|
%
|
139,057
|
0.00
|
%
|
|||||||
Robert
Malecki
|
43,913
|
0.01
|
%
|
43,913
|
0.00
|
%
|
|||||||
Tom
Millitzer
|
7,026
|
0.00
|
%
|
7,026
|
0.00
|
%
|
|||||||
Paul
Halvorsen
|
14,638
|
0.00
|
%
|
14,638
|
0.00
|
%
|
|||||||
Estate
of Roger L. Beck, Jr.
|
587,471
|
0.15
|
%
|
587,471
|
0.00
|
%
|
|||||||
Jansen
Blanton
|
355,893
|
0.09
|
%
|
355,893
|
0.00
|
%
|
|||||||
Jared
B. Reimer
|
153,156
|
0.04
|
%
|
153,156
|
0.00
|
%
|
|||||||
Dr.
Ronald Reimer
|
72,456
|
0.02
|
%
|
72,456
|
0.00
|
%
|
|||||||
Pankaj
Sharma
|
72,456
|
0.02
|
%
|
72,456
|
0.00
|
%
|
|||||||
Kim
DeWitt
|
42,215
|
0.01
|
%
|
42,215
|
0.00
|
%
|
|||||||
Robert
Doggett
|
351,133
|
0.09
|
%
|
351,133
|
0.00
|
%
|
|||||||
Dr.
Bhagwab Swaroop Misra
|
7,319
|
0.00
|
%
|
7,319
|
0.00
|
%
|
|||||||
Subtotal
(4)
|
1,846,733
|
0.47
|
%
|
1,846,733
|
0.00
|
%
|
|||||||
Cornell
Capital Partners, L.P. (5)
|
19,698,401
|
4.99
|
%
|
62,661,667
|
1.95
|
%
|
|||||||
Airlie
Master Opportunity Fund, Ltd.
|
1,866,666
|
0.48
|
%
|
1,866,666
|
0.00
|
%
|
|||||||
Richard
Berritt
|
1,866,667
|
0.48
|
%
|
1,866,667
|
0.00
|
%
|
|||||||
Jonathan
Heine
|
1,866,667
|
0.48
|
%
|
1,866,667
|
0.00
|
%
|
|||||||
Subtotal
(6)
|
5,600,000
|
1.42
|
%
|
5,600,000
|
0.00
|
%
|
|||||||
ABLECO
Finance, LLC
|
456,250
|
0.12
|
%
|
456,250
|
0.00
|
%
|
|||||||
ARK-CLO
2000-1
|
447,303
|
0.11
|
%
|
447,303
|
0.00
|
%
|
|||||||
Avenue
Special Situations Fund II, LP
|
118,386
|
0.03
|
%
|
118,386
|
0.00
|
%
|
|||||||
BNP
Paribas
|
208,727
|
0.05
|
%
|
208,727
|
0.00
|
%
|
|||||||
Cerberus
Partners, L.P.
|
1,884,475
|
0.48
|
%
|
1,884,475
|
0.00
|
%
|
|||||||
Foothill
Partners III, L.P.
|
684,375
|
0.18
|
%
|
684,375
|
0.00
|
%
|
|||||||
Morgan
Stanley Prime Income Trust
|
98,655
|
0.03
|
%
|
98,655
|
0.00
|
%
|
|||||||
PNC
Bank N.A.
|
208,727
|
0.05
|
%
|
208,727
|
0.00
|
%
|
|||||||
US
Bank, N.A.
|
208,727
|
0.05
|
%
|
208,727
|
0.00
|
%
|
|||||||
Wells
Fargo Foothill, Inc.
|
684,375
|
0.18
|
%
|
684,375
|
0.00
|
%
|
|||||||
Subtotal
(7)
|
5,000,000
|
1.27
|
%
|
5,000,000
|
0.00
|
%
|
|||||||
Peter
Aquino
|
3,728
|
0.00
|
%
|
300
|
0.00
|
%
|
|||||||
Daniel
P. Behuniak
|
252,188
|
0.06
|
%
|
20,291
|
0.06
|
%
|
|||||||
Yakov
Benshlomo
|
60,525
|
0.02
|
%
|
4,870
|
0.01
|
%
|
|||||||
Brent
& Patrice Clapacs Family Trust
|
53,926
|
0.01
|
%
|
4,339
|
0.01
|
%
|
|||||||
Tiffany
Brown
|
6,769
|
0.00
|
%
|
545
|
0.00
|
%
|
|||||||
Adrian
Catalano
|
60,525
|
0.02
|
%
|
4,870
|
0.01
|
%
|
|||||||
Diane
Clarence
|
13,472
|
0.00
|
%
|
1,084
|
0.00
|
%
|
|||||||
George
F. Conniff
|
50,437
|
0.01
|
%
|
4,058
|
0.01
|
%
|
|||||||
William
P. Dioguardi
|
693,513
|
0.18
|
%
|
55,800
|
0.16
|
%
|
|||||||
Chris
Drazdys
|
114,199
|
0.03
|
%
|
9,188
|
0.03
|
%
|
|||||||
Val
Drazdys
|
41,162
|
0.01
|
%
|
3,312
|
0.01
|
%
|
|||||||
Natasha
Ervin
|
2,848
|
0.00
|
%
|
229
|
0.00
|
%
|
|||||||
Donald
F. Farley
|
75,656
|
0.02
|
%
|
6,087
|
0.02
|
%
|
|||||||
Mary
Guerra
|
121,050
|
0.03
|
%
|
9,740
|
0.03
|
%
|
|||||||
Peter
Habib
|
52,959
|
0.01
|
%
|
4,261
|
0.01
|
%
|
|||||||
Raja
B. Hannush
|
30,263
|
0.01
|
%
|
2,435
|
0.01
|
%
|
|||||||
David
Hoachman
|
113,484
|
0.03
|
%
|
9,131
|
0.03
|
%
|
|||||||
Jimayne
Howser
|
7,439
|
0.00
|
%
|
599
|
0.00
|
%
|
|||||||
Lawrence
R. Hyman
|
30,263
|
0.01
|
%
|
2,435
|
0.01
|
%
|
|||||||
Lawrence
R. and Lois Hyman as TBE
|
302,625
|
0.08
|
%
|
24,349
|
0.07
|
%
|
|||||||
Ammar
Kawash
|
151,260
|
0.04
|
%
|
12,170
|
0.04
|
%
|
|||||||
Timothy
Keating
|
110,603
|
0.03
|
%
|
8,899
|
0.03
|
%
|
|||||||
Allen
H. Kupetz
|
25,218
|
0.01
|
%
|
2,029
|
0.01
|
%
|
|||||||
Frank
Frost Lane
|
68,091
|
0.02
|
%
|
5,479
|
0.02
|
%
|
|||||||
JoAnn
Lanning
|
7,418
|
0.00
|
%
|
597
|
0.00
|
%
|
|||||||
Paul
Latchford
|
222,914
|
0.06
|
%
|
17,936
|
0.05
|
%
|
|||||||
Jerry
and Michelle Levine as TBE
|
151,313
|
0.04
|
%
|
12,175
|
0.04
|
%
|
|||||||
Grover
A. Lewis
|
15,131
|
0.00
|
%
|
1,217
|
0.00
|
%
|
|||||||
Brian
Leyda
|
13,982
|
0.00
|
%
|
1,125
|
0.00
|
%
|
|||||||
Ezra
P. Mager
|
2,559,163
|
0.66
|
%
|
205,910
|
0.61
|
%
|
Thomas
Mazerski (8)
|
2,047,344
|
0.53
|
%
|
164,729
|
0.48
|
%
|
|||||||
Robert
William McCausland
|
504,376
|
0.13
|
%
|
40,582
|
0.12
|
%
|
|||||||
Hugh
McConnell
|
96,686
|
0.02
|
%
|
7,779
|
0.02
|
%
|
|||||||
Paul
B. McHugh
|
38,583
|
0.01
|
%
|
3,104
|
0.01
|
%
|
|||||||
Randy
Moore
|
105,708
|
0.03
|
%
|
8,505
|
0.03
|
%
|
|||||||
Mark
Norris (24)
|
151,313
|
0.04
|
%
|
12,175
|
0.04
|
%
|
|||||||
Richard
O’Connell
|
1,270,260
|
0.33
|
%
|
102,205
|
0.30
|
%
|
|||||||
Jennifer
Orem
|
932
|
0.00
|
%
|
75
|
0.00
|
%
|
|||||||
John
C. Payne
|
933,093
|
0.24
|
%
|
75,076
|
0.22
|
%
|
|||||||
Jamie
Pollock
|
3,464
|
0.00
|
%
|
279
|
0.00
|
%
|
|||||||
Richard
Ramlall
|
324,560
|
0.08
|
%
|
26,114
|
0.08
|
%
|
|||||||
Cynthia
A. Ryan
|
189,140
|
0.05
|
%
|
15,218
|
0.04
|
%
|
|||||||
Frederick
Sass
|
25,218
|
0.01
|
%
|
2,029
|
0.01
|
%
|
|||||||
Joseph
P. Schmelzeis
|
31,523
|
0.01
|
%
|
2,536
|
0.01
|
%
|
|||||||
Fredrik
C. Schreuder
|
252,186
|
0.06
|
%
|
20,291
|
0.06
|
%
|
|||||||
Stephen
Schwartz
|
63,048
|
0.02
|
%
|
5,073
|
0.01
|
%
|
|||||||
Shah,
Vipul
|
63,046
|
0.02
|
%
|
5,073
|
0.01
|
%
|
|||||||
Spencer
Segura
|
453,937
|
0.12
|
%
|
36,524
|
0.11
|
%
|
|||||||
Spencer
Trask Illumination Fund
|
635,512
|
0.16
|
%
|
51,133
|
0.15
|
%
|
|||||||
Spencer
Trask Media & Communication Group, LLC
|
7,565,618
|
1.94
|
%
|
608,728
|
1.79
|
%
|
|||||||
Melissa
Stoneberg
|
3,700
|
0.00
|
%
|
298
|
0.00
|
%
|
|||||||
Stacey
Swoboda
|
3,728
|
0.00
|
%
|
300
|
0.00
|
%
|
|||||||
Paul
Taylor
|
126,093
|
0.03
|
%
|
10,145
|
0.03
|
%
|
|||||||
Luca
Toscani
|
36,214
|
0.01
|
%
|
2,914
|
0.01
|
%
|
|||||||
Michele
Toscani
|
12,862
|
0.00
|
%
|
1,035
|
0.00
|
%
|
|||||||
Greg
Van Allen
|
13,982
|
0.00
|
%
|
1,125
|
0.00
|
%
|
|||||||
John
Vandewalle
|
30,263
|
0.01
|
%
|
2,435
|
0.01
|
%
|
|||||||
Viventures
2 Entrepeneurs Fund LP
|
43,502
|
0.01
|
%
|
3,500
|
0.01
|
%
|
|||||||
Viventures
2 FCPR
|
15,284,489
|
3.92
|
%
|
1,229,782
|
3.61
|
%
|
|||||||
Nancy
Walcutt
|
3,939
|
0.00
|
%
|
317
|
0.00
|
%
|
|||||||
Subtotal
(9)
|
35,726,443
|
9.13
|
%
|
2,874,539
|
8.39
|
%
|
|||||||
Martin
Levetin (10)
|
150,000
|
0.04
|
%
|
600,000
|
0.00
|
%
|
|||||||
Geoffrey
B. Amend (11)
|
891,302
|
0.23
|
%
|
3,500,000
|
0.00
|
%
|
|||||||
Larry
Bouts (12)
|
800,000
|
0.21
|
%
|
800,000
|
0.00
|
%
|
|||||||
Dr.
Bruce Bowman (12)
|
166,667
|
0.04
|
%
|
250,000
|
0.00
|
%
|
|||||||
Hank
Deily (13)
|
-
|
0.00
|
%
|
750,000
|
0.00
|
%
|
|||||||
John
Dumbleton (14)
|
1,499,999
|
0.38
|
%
|
2,000,000
|
0.00
|
%
|
|||||||
Kurt
Gordon (15)
|
6,468,750
|
1.64
|
%
|
1,500,000
|
1.45
|
%
|
|||||||
Don
Gunther (12)
|
800,000
|
0.21
|
%
|
800,000
|
0.00
|
%
|
|||||||
Hawk
Associates, Inc. (16)
|
200,000
|
0.05
|
%
|
200,000
|
0.00
|
%
|
|||||||
John
von Harz (17)
|
800,000
|
0.21
|
%
|
800,000
|
0.00
|
%
|
|||||||
Kevin
Kuykendall (18)
|
3,500,000
|
0.89
|
%
|
3,500,000
|
0.00
|
%
|
|||||||
Michael
Kleeman (12)
|
104,167
|
0.03
|
%
|
250,000
|
0.00
|
%
|
|||||||
Chris
MacFarland (19)
|
745,833
|
0.15
|
%
|
1,050,000
|
0.00
|
%
|
|||||||
Tammy
Martin (20)
|
818,181
|
0.21
|
%
|
1,500,000
|
0.00
|
%
|
|||||||
Tom
Mazerski (8)
|
708,328
|
0.18
|
%
|
2,000,000
|
0.00
|
%
|
|||||||
Michael
O’Neil (19)
|
945,833
|
0.21
|
%
|
1,050,000
|
0.00
|
%
|
|||||||
Ocean
Avenue Advisors (21)
|
2,000,000
|
0.51
|
%
|
2,000,000
|
0.00
|
%
|
|||||||
Philip
Otto (12)
|
166,667
|
0.04
|
%
|
250,000
|
0.00
|
%
|
|||||||
Bruce
Sanguinetti (22)
|
2,500,000
|
0.64
|
%
|
3,000,000
|
0.00
|
%
|
|||||||
Paul
Silverman (12)
|
1,000,000
|
0.26
|
%
|
1,000,000
|
0.00
|
%
|
|||||||
Don
Sledge (19)
|
645,833
|
0.13
|
%
|
750,000
|
0.00
|
%
|
|||||||
Fred
Tarter (12)
|
1,000,000
|
0.26
|
%
|
1,000,000
|
0.00
|
%
|
|||||||
Jay
O. Wright (23)
|
14,551,075
|
3.61
|
%
|
5,000,000
|
3.39
|
%
|
|||||||
40,312,635
|
9.40
|
%
|
32,950,000
|
4.43
|
%
|
||||||||
Grand
Totals
|
120,534,212
|
27.21
|
%
|
123,732,939
|
11.87
|
%
|
|||||||
(11)
Geoffrey Amend currently serves as our General Counsel and
corporate
Secretary.
|
(12)
Includes warrants to purchase common stock issued to each
member of our
board of advisors.
|
(13)
Hank Deily currently serves as our Corporate
Controller.
|
(14)
John Dumbleton currently serves as our Executive Vice President,
Sales and
Business Development.
|
(15)
Kurt Gordon currently serves as our Chief Financial
Officer.
|
(16)
Hawk Associates currently provides investor and public relations
services
to us.
|
(17)
John von Harz, a former member of our board of advisors,
currently serves
as a consultant to our NeoReach Wireless organization in
the area of
business development.
|
(18)
Kevin Kuykendall served as President of our voice business
segment from
June 2004 through December 2004.
|
(19)
Includes warrants to purchase common stock issued to each
outside member
of our Board of Directors.
|
(20)
Tammy Martin, formerly the General Counsel of Davel, currently
serves as
its Chief Executive Officer.
|
(21)
Includes shares issuable upon the exercise of a warrant to
purchase our
common stock that was granted in July 2004 connection with
the provision
of investor relations
services.
|
(22)
Bruce Sanguinetti currently serves as President and Chief
Executive
Officer of NeoReach.
|
(23)
Jay O. Wright currently serves as our President and Chief
Executive
Officer; he also serves as Chairman of the Board of
Directors.
|
(24)
Mark Norris currently serves as chief Financial Officer of
our voice
business segment on a temporary basis.
|
Technology
|
Our
wireless technology development efforts are conducted by our wholly-owned
subsidiary, NeoReach, Inc. (NeoReach”), and its subsidiary NeoReach
Wireless, Inc. (“NeoReach Wireless”). NeoReach is focused on our ongoing
ZigBee chip development work while NeoReach Wireless is focused
on our
strategic initiatives within the Wi-Fi / Wi-Max space.
|
Voice Services
|
Our
voice services segment is led by CloseCall America, Inc. (“CloseCall”), a
Competitive Local Exchange Carrier (“CLEC”) based in Stevensville,
Maryland; American Fiber Network, Inc. (“AFN”), a CLEC based in Kansas
City, Kansas; and Davel Communications, Inc. (“Davel”), an independent
payphone provider based in Cleveland, Ohio. CloseCall offers our
customers
a full array of telecommunications products and services including
local,
long-distance, 1.800CloseCall anytime/anywhere calling, digital
wireless,
high-speed telephone (voice over IP), and dial-up and DSL Internet
services. AFN is licensed to provide local telephone, long distance
and
Internet services in the forty-eight (48) states. Davel owns and
operates
approximately 38,000 payphones in 45 states and is one of the largest
independent payphone operators in the United States.
|
Internet Services
|
Our
internet services segment is led by DFW Internet Services, Inc.
(“DFW”,
doing business as Nationwide Internet), an Internet services provider
based in Irving, Texas, and its acquired Internet service provider
subsidiaries. Our Internet services segment provides broadband
and dial-up
internet access, web-hosting services and related Internet services
to
business and residential customers in over 40
states.
|
· |
The
election of five directors to our Board of Directors, each to serve
until
our 2006 Annual Stockholders Meeting and until his successor has
been
elected and qualified or until his earlier resignation, death or
removal.
|
Jack
W. Beech
|
Chris
MacFarland
|
Michael
G. O’Neil
|
|
Don
Sledge
|
Jay
O. Wright
|
· |
The
approval of an increase in the number of shares available under
our 2001
Equity Performance Plan from 1,000,000 to 30,000,000.
|
· |
The
amendment of the Certificate of Incorporation to increase the authorized
number of shares of common stock from 600,000,000 to 1,500,000,000
shares
and the authorized number of preferred shares from 5,035,425 to
20,035,425.
|
· |
The
ratification of the appointment of Bagell, Josephs & Company, L.L.C.
as our independent registered public accounting firm for the fiscal
year
ending March 31, 2006.
|
· |
In
April 2005, our NeoReach Wireless business unit was awarded a five-year
contract (plus two five-year options) to deploy and manage a city-wide
wireless network covering the 40 square mile area of Tempe, Arizona.
The
network is expected to reach approximately 65,000 households, 1,100
businesses, 50,000 students and the annual visitors to Tempe. The
network
will also provide municipal services to Tempe police, fire, emergency,
city and Arizona State University personnel. We believe that the
WazTempe
project is one of the first of its kind by providing a cost-effective
alternative to residential dial-up service and local area hot-spot
wireless access and serving as an alternative and/or complement
to DSL and
cable. NeoRech Wireless also launched a pilot project to set up
a wireless
access zone in Chandler, Arizona, a suburb of Phoenix.
|
· |
In
April 2005, we announced that CloseCall plans to launch a new prepaid
wireless product. The new service offers a “no surprise” wireless bill for
consumers and will offer new features including parental controls,
which
will have the ability to restrict outgoing calls to only certain
numbers.
CloseCall also announced that it is now providing digital subscriber
line
(DSL) high-speed connectivity in Ohio, Michigan and Indiana, in
addition
to Maryland, New Jersey and Delaware where CloseCall has previously
offered DSL service.
|
· |
In
May 2005, CloseCall signed a five-year commercial agreement with
Verizon.
The new commercial agreement secures pricing to 2010, and will
allow
CloseCall to increase the number of customers to which it can provide
its
CloseCall local, long-distance, cellular and Internet
services.
|
· |
In
May 2005, we appointed Tammy L. Martin as Chief Executive Officer
and
President of Davel, our pay telephone subsidiary.
|
· |
On
July 11, 2005, we entered into a letter of intent with ATX Communications,
Inc. (“ATX”) under which we intended to acquire certain ISP assets of ATX
clustered in several mid-western states. Negotiation of this transaction
has terminated.
|
· |
On
June 18, 2005, we entered into a letter of intent to acquire Tiger
Communications, Inc., an Internet and telecommunications company
based in
Chicago. Although the letter of intent has expired, the companies
continue
to discuss the terms of a possible business
combination.
|
Corporate
|
6
full-time employees and 1
consultant
|
Technology
|
56
full-time employees and 8
consultants
|
Voice Services
|
135
full-time employees and 4
consultant
|
Internet Services
|
107
full-time employees and 1
consultant
|
For
the Three
Months Ended March
31,
|
For
the Three Months
Ended June 30, |
|||||||||
2005
|
2004
|
2005
|
||||||||
Net
Income (Loss)
|
$
|
100,368
|
$
|
(757,439
|
)
|
$
|
419,191
|
|||
Add
non-EBITDA items included in net results:
|
||||||||||
Depreciation
and amortization
|
777,001
|
39,944
|
822,377
|
|||||||
Interest
expense, net
|
606,283
|
302,466
|
932,175
|
|||||||
EBITDA
|
$
|
1,483,652
|
$
|
(415,029
|
)
|
$
|
2,173,743
|
For
the Fiscal Years Ended
March 31, |
|||||||
2005
|
2004
|
||||||
Net
Loss
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
Add
back non-EBIDTA items included in net loss:
|
|||||||
Depreciation
and amortization
|
2,442,363
|
374,342
|
|||||
Interest, net
|
1,574,502
|
21,350
|
|||||
EBITDA
|
$
|
(1,342,857
|
)
|
$
|
(1,762,152
|
)
|
Name
|
Age
|
Position
|
||
Jay
O. Wright
|
35
|
President,
Chief Executive Officer and Chairman of the Board
|
||
Kurt
Gordon
|
39
|
Chief
Financial Officer
|
||
Geoffrey
B. Amend
|
37
|
General
Counsel and
Secretary
|
||
Jack
W. Beech
|
34
|
President,
DFW Internet Services, Inc., and Director
|
||
Tom
Mazerski
|
52
|
Chief
Executive Officer, CloseCall America, Inc.
|
||
Tammy
L. Martin
|
41
|
Chief
Executive Officer, President and General Counsel of Davel Communications,
Inc.
|
||
Bruce
Sanguinetti
|
51
|
Chief
Executive Officer and President, NeoReach, Inc.
|
||
John
Dumbleton
|
38
|
Executive
Vice President, Sales and Business Development
|
||
Chris
MacFarland
|
33
|
Director
|
||
Michael
G. O’Neil
|
62
|
Director
|
||
Don
Sledge
|
65
|
Director
|
Director
|
Audit
Committee
|
Compensation
Committee
|
Nominating
and
Governance Committee
|
|||
Chris
MacFarland
|
X
|
X
|
Chair
|
|||
Michael
O’Neil
|
Chair
|
X
|
X
|
|||
Don
Sledge
|
X
|
Chair
|
X
|
Summary
Compensation Table
|
Annual
Compensation
|
Long
Term Compensation
|
|||||||||||||
Name
and Principal Position
|
Year
|
Salary(1)
|
Paid
Bonus
|
Deferred
Bonus(2)
|
Total
Bonus
|
Securities
Underlying
Options
|
All
Other
Compensation
|
|||||||
Jay
O. Wright (3)
|
2005
|
$179,000
|
$317,150
|
$649,062
|
$966,212
|
15,182,500
|
--
|
|||||||
President
and Chief
|
2004
|
$45,500
|
$17,990
|
--
|
$17,990
|
--
|
--
|
|||||||
Executive
Officer
|
||||||||||||||
|
||||||||||||||
Kurt
Gordon (4)
|
2005
|
$174,000
|
$297,150
|
$649,062
|
$946,212
|
--
|
--
|
|||||||
Chief
Financial Officer
|
2004
|
$13,000
|
$10,000
|
--
|
$10,000
|
6,500,000
|
--
|
|||||||
|
||||||||||||||
Jack
W. Beech (5)
|
2005
|
$145,360
|
$25,708
|
$99,292
|
$125,000
|
--
|
--
|
|||||||
President,
DFW Internet
|
2004
|
$36,340
|
$125,000
|
--
|
$125,000
|
--
|
--
|
|||||||
Services,
Inc.
|
||||||||||||||
|
||||||||||||||
Geoffrey
B. Amend
(6)
|
2005
|
$56,250
|
--
|
--
|
--
|
2,000,000
|
--
|
|||||||
General
Counsel
|
||||||||||||||
|
||||||||||||||
Tom
Mazerski (7)
|
2005
|
$83,077
|
--
|
--
|
--
|
500,000
|
--
|
|||||||
Chief
Executive Officer,
|
||||||||||||||
Close
Call America, Inc.
|
||||||||||||||
|
||||||||||||||
Tammy
Martin (8)
|
2005
|
$68,069
|
--
|
--
|
--
|
--
|
--
|
|||||||
Chief
Executive Officer,
|
||||||||||||||
Davel
Communications, Inc.
|
||||||||||||||
|
||||||||||||||
Bruce
Sanguinetti (9)
|
2005
|
$45,000
|
--
|
--
|
--
|
3,000,000
|
--
|
|||||||
Chief
Executive Officer and
|
||||||||||||||
President,
NeoReach, Inc.
|
||||||||||||||
|
||||||||||||||
John
Dumbleton (10)
|
2005
|
$37,500
|
--
|
--
|
--
|
2,000,000
|
--
|
|||||||
Executive
Vice President,
|
||||||||||||||
Sales
and Business Development
|
(1)
|
Mr.
Wright, Mr. Gordon and Mr. Beech, each joined our Company during
the
fiscal year ended March 31, 2004. Mr. Amend, Mr. Mazerski, Mr.
Sanguinetti, Ms. Martin and Mr. Dumbleton each joined our Company
during
the fiscal year ended March 31, 2005. A description of each officer’s
compensation package is provided below.
|
(2)
|
Mr.
Wright and Mr. Gordon each agreed to defer $649,062 in bonus compensation
payable to each of them during the fiscal year ending March 31,
2005, for
bonuses earned under the terms of their respective employment agreements.
Mr. Wright and Mr. Gordon were paid bonuses of $317,150 and $297,150,
respectively, during the fiscal year ending March 31,
2005.
|
(3)
|
Mr.
Jay O. Wright joined us in December 2003 as Chief Executive Officer.
Mr.
Wright was paid a base salary of $180,000 in calendar year 2004
and was
eligible to receive a bonus equal to 1% of the revenues for the
most
recent 12 month period of each acquisition made by the Company
during his
employment period. Mr. Wright also received warrants to purchase
15,182,500 shares of our common stock at an exercise price of $0.018
per
share upon the execution of his initial employment agreement. The
warrants
became exercisable as to 3,682,500 shares on April 15, 2004 and
as to an
additional 4,300,000 shares upon the Company achieving a market
a $25
million market cap for ten (10) consecutive trading days and a
price per
share of not less than $0.07, which has occurred. The remaining
7,200,000
shares began vesting ratably on May 15, 2004 in an amount of 300,000
shares on that date and each month thereafter until April 15, 2006.
Subsequent to year-end March 31, 2005, Mr. Wright’s employment agreement
was amended to, among other things, extend his employment period
to
December 31, 2007. Mr. Wright’s base salary has been increased to $210,000
for calendar year 2005, $240,000 for calendar year 2006 and $270,000
for
calendar year 2007. The terms of the new employment agreement eliminate
the payment of bonuses as a result of the closing of an acquisition.
Mr.
Wright is now eligible to receive up to $240,000 in bonuses tied
to
certain deliverables and profitability. In connection with the
execution
of the new employment agreement, Mr. Wright also received additional
warrants to purchase 5,000,000 shares of our common stock at an
exercise
price of $0.22 per share, which warrants vest ratably from April
1, 2005
to December 31, 2007.
|
(4)
|
Mr.
Kurt Gordon joined us in February 2004 as Chief Financial Officer.
Mr.
Gordon was paid a base salary of $156,000 in calendar year 2004
and was
eligible to receive a bonus equal to 1% of the revenues for the
most
recent 12 month period of each acquisition made by the Company
during his
employment period. Mr. Gordon also received a warrant to purchase
up to
6,500,000 shares of common stock at an exercise price of $0.018
per share
upon the execution of his employment agreement. The warrant became
exercisable as to 500,000 shares on March 1, 2004 and as to an
additional
2,250,000 shares upon the Company achieving a $25 million market
cap for
ten (10) consecutive trading days and a price per share of not
less than
$0.07, which has occurred. The remaining 3,750,000 shares began
vesting
ratably on March 1, 2004 as to 156,250 shares and each month thereafter
until February 1, 2006. Effective April 1, 2005, Mr. Gordon’s employment
agreement was amended to, among other things, extend his employment
period
to March 31, 2006. The terms of the new employment agreement eliminate
the
payment of bonuses as a result of the closing of an acquisition.
Mr.
Gordon’s base salary was increased to $210,000 per year. Mr. Gordon is
eligible to receive $140,000 in bonuses tied to certain deliverables
and
profitability. In connection with the execution of the new employment
agreement, Mr. Gordon also received additional warrants to purchase
1,500,000 shares of our common stock at an exercise price of $0.22
per
share, which warrants vest ratably from April 1, 2005 to March
31,
2006.
|
(5)
|
Mr.
Jack Beech joined us in January 2004 as President of DFW Internet
Services, Inc. Mr. Beech’s services to our Company are provided under the
terms of a Consulting Agreement by and among the Company, DFW
Internet
Services, Inc., Beech Holdings, Inc. (“BHI”) and Mr. Beech. Through BHI,
Mr. Beech is paid a consulting fee of $145,360.65 and is eligible
to
additional fees of up to $125,000 annually for the first three
years of
BHI’s engagement by the Company. Mr. Beech is also eligible to
receive
annual bonuses as the Board may determine from time to time.
BHI was paid
a $125,000 fee in January 2004 and $25,708 in January 2005.
BHI agreed to
a deferral of $99,292 in bonus compensation payable in January
2005 under
the terms of the above referenced Consulting Agreement.
|
(6)
|
Mr.
Geoffrey B. Amend joined us in November 2004 as General Counsel.
Mr. Amend
is paid a base salary of $150,000 per year and is eligible
to receive a
bonus equal to 1.0% of the Company’s EBITDA for each fiscal year, but no
greater than $90,000 for any 12-month period. Mr. Amend also
received a
warrant to purchase up to 2,000,000 shares of our common stock,
which
warrants are exercisable at price of $0.20 per share. The warrants
began
vesting ratably over twenty-four months on December 1, 2004.
Subsequent to
March 31, 2005, Mr. Amend’s employment agreement was amended to, among
other things, extend his employment period to March 31, 2007
and increase
his base salary to $180,000 per year. In
connection with the execution of the new employment agreement,
Mr. Amend
also received additional warrants to purchase 1,500,000 shares
of our
common stock at an exercise price of $0.15 per share. The warrants
vest
ratably from April 20, 2005 to March 31, 2007.
|
(7)
|
Mr.
Mazerski joined us in October 2004 as Chief Executive Officer
of CloseCall
America, Inc. Mr. Mazerski is paid a base salary of $180,000
per year and
is eligible to receive a bonus equal to 2.5% of adjusted EBITDA
from all
Telco Operations. Mr. Mazerski also received an option to purchase
up to
500,000 shares of common stock at an exercise price of $0.225
per share.
Those options were subsequently reclassified as warrants to
purchase
common stock. Two Hundred Fifty Thousand (250,000) warrants
to purchase
our common stock vest ratably over the twenty-four months following
the
execution of the Agreement and the remaining warrants vest
upon
Mobilepro’s Telco Operations reaching
$5,000,000 in Adjusted EBIDTA.
In April 2005, we granted Mr. Mazerski additional warrants
to purchase
1,500,000 shares of our common stock at an exercise price of
$0.15 per
share that vest ratably from April 20, 2005 to October 15,
2006.
|
(8)
|
Ms.
Martin joined us in November 2004 as General Counsel of Davel
Communications, Inc. Ms. Martin is paid a base salary of $186,295
per year
and an annual car allowance of $8,400. In May 2005, Ms. Martin
was
promoted to Chief Executive Officer of Davel Communications,
Inc. Ms.
Martin also received warrants to purchase 1,500,000 shares
of our common
stock at an exercise price of $0.15 per share that vest ratably
from April
20, 2005 to March 31, 2006.
|
(9)
|
Mr.
Sanguinetti joined us in January 2005 as President and Chief
Executive
Officer of NeoReach, Inc. Mr. Sanguinetti is paid a base salary
of
$180,000 per year and is eligible to receive a bonus on terms
and
conditions to be mutually agreed upon by Mr. Sanguinetti and
the Company.
Such annual bonus will be targeted to achieve between 25% and
150% of Mr.
Sanguinetti’s base salary. Mr. Sanguinetti also received a warrant to
purchase up to 3,000,000 shares of common stock at an exercise
price of
$0.16 per share. The warrants vest ratably over the initial
twelve months
of his employment.
|
(10)
|
Mr.
Dumbleton joined us in January 2005 as our Vice President,
Sales and
Business Development. Mr. Dumbleton is paid a base salary of
$180,000 per
year and is eligible to receive a bonus on terms and conditions
to be
mutually agreed upon by Mr. Dumbleton and the Company. Mr.
Dumbleton also
received a warrant to purchase up to 2,000,000 shares of Common
Stock at
an exercise price of $0.17 per share. The warrants vest ratably
over the
initial twelve months of his employment.
|
Name
|
Number
of
Securities
Underlying
Options/SARs
Granted
(1)
|
Percent
of Total
Options/SARs
Granted
to
Employees
In
Fiscal
Year
|
Exercise
of
Base
Price
($/Sh)
|
Expiration
Date
|
||||
Jay
O. Wright
|
15,182,500
|
53.6%
|
$0.018
|
4/15/14
|
||||
Kurt
Gordon
|
--
|
N/A
|
N/A
|
N/A
|
||||
Jack
W. Beech
|
--
|
N/A
|
N/A
|
N/A
|
||||
Geoffrey
Amend
|
2,000,000
|
7.1%
|
$0.200
|
11/01/14
|
||||
Tom
Mazerski
|
500,000
|
1.8%
|
$0.225
|
10/18/14
|
||||
Tammy
Martin
|
--
|
N/A
|
N/A
|
N/A
|
||||
Bruce
Sanguinetti
|
3,000,000
|
10.6%
|
$0.160
|
1/01/15
|
||||
John
Dumbleton
|
2,000,000
|
7.1%
|
$0.170
|
1/17/15
|
Name
|
Number
of
Shares
Acquired
on
Exercise
|
Value
Realized
|
Number
of Securities
Underlying
Unexercised
Options
at
March
31, 2005
Exercisable/Unexercisable
|
Value
of Unexercised
In-the-Money
Options at
March
31, 2005(1)
Exercisable/Unexercisable
|
||||
Jay
O. Wright
|
--
|
$0
|
11,282,500
/ 3,900,000
|
$1,714,940
/ $592,800
|
||||
Kurt
Gordon
|
--
|
$0
|
4,781,250
/ 1,718,750
|
$726,750
/ $261,250
|
||||
Jack
W. Beech
|
--
|
$0
|
--
|
$
0
/ $0
|
||||
Geoffrey
B. Amend
|
--
|
$0
|
333,333
/ 1,666,667
|
$
0
/ $0
|
||||
Tom
Mazerski
|
--
|
$0
|
52,083
/ 447,917
|
$
0
/ $0
|
||||
Tammy
Martin
|
--
|
$0
|
--
|
$
0
/ $0
|
||||
Bruce
Sanguinetti
|
--
|
$0
|
750,000
/ 2,250,000
|
$7,500
/ $22,500
|
||||
John
Dumbleton
|
--
|
$0
|
666,666
/ 1,333,334
|
$
0
/ $0
|
(1)
|
The
value of unexercised in-the-money options at fiscal year end
is calculated
using the last sale price of $0.17 per share as of March 31,
2005, the
last trading day of fiscal year 2005 as reported on the OTC Bulletin
Board, less the applicable exercise
price.
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
(a)
|
(b)
|
(c)
|
|
Equity
compensation plans approved by security holders (1)
|
150,000
|
$0.250
|
53,963
|
Equity
compensation plans not approved by security holders (2)
|
62,807,500
|
$0.119
|
N/A
|
Totals
|
62,957,500
|
$0.119
|
N/A
|
(1)
|
A
total of 1,000,000 shares were reserved for issuance under Mobilepro’s
2001 Equity Performance Plan at March 31, 2005. Available shares
may be
issued as stock options, restricted stock or stock bonuses. In
September
2005, the stockholders approved an increase in the number of shares
available for issuance under the Plan to 30,000,000.
|
(2)
|
Includes
options to purchase 1,575,000 shares and warrants to purchase 61,232,500
shares that were issued by Mobilepro under non-plan options and
warrants.
|
Shares
|
||||||
Beneficially
|
Percent
|
|||||
Name
and Address
|
Title
of Class
|
Owned
(1)
|
of
Class (1)
|
|||
Cornell
Capital Partners, L.P. (2)
|
Common
|
19,698,401
|
5.0%
|
|||
Daniel
Lozinsky (3)
|
Common
|
23,143,122
|
5.9%
|
|||
Jay
O. Wright (4)
|
Common
|
14,551,075
|
3.6%
|
|||
Kurt
Gordon (5)
|
Common
|
6,468,750
|
1.6%
|
|||
Geoffrey
B. Amend (5)
|
Common
|
891,302
|
*
|
|||
Jack
W. Beech
|
Common
|
9,380,863
|
2.4%
|
|||
Tom
Mazerski (6)
|
Common
|
2,756,448
|
*
|
|||
Tammy
Martin (5)
|
Common
|
818,181
|
*
|
|||
Bruce
Sanguinetti (5)
|
Common
|
2,500,000
|
*
|
|||
John
Dumbleton (5)
|
Common
|
1,499,999
|
*
|
|||
Chris
MacFarland (5)
|
Common
|
745,833
|
*
|
|||
Michael
G. O’ Neil (5)
|
Common
|
945,833
|
*
|
|||
Don
Sledge (5)
|
Common
|
645,833
|
*
|
|||
Officers
and Directors as a Group
(11 Persons) (7) |
Common
|
41,204,117
|
9.8%
|
*
|
Less
than 1%.
|
(1)
|
Applicable
percentage of ownership is based on 388,978,011 shares of common
stock
outstanding as of September 15, 2005, together with applicable
options and
warrants for each shareholder. Beneficial ownership is determined
in
accordance with the rules of the Securities and Exchange Commission
and
generally includes voting or investment power with respect to
securities.
Shares of common stock subject to options and warrants that are
currently
exercisable or exercisable within 60 days of September 15, 2005
are deemed
to be beneficially owned by the person holding such options for
the
purpose of computing the percentage of ownership of such person,
but are
not treated as outstanding for the purpose of computing the percentage
ownership of any other person.
|
(2) |
Includes
13,698,401 shares of common stock, and 6,000,000 shares
of common
stock issuable upon the exercise of a warrant to purchase our
common
stock; excludes 1,000,000 shares of our common stock scheduled
to be
issued to Cornell Capital within the next 60 days pursuant to
the
conversion of outstanding draws made under the $100 million Standby
Equity
Line of Credit. Also, excludes 51,666,667 shares of our common
stock
issuable upon the conversion of the $15.5 million debenture as,
under the
terms of the debenture, Cornell Capital is required to provide
65 days
written notice in order to execute a conversion resulting in
beneficial
ownership greater than 4.99%.
|
(3) |
Includes
18,143,122 shares of our common stock and 5,000,000 shares of common
stock
issuable upon the exercise of a warrant to purchase our common
stock.
|
(4) |
Includes
111,000 shares of our common stock and 14,440,075 shares of common
stock
issuable upon the exercise of warrants to purchase our common
stock.
|
(5) |
Includes
shares of common stock issuable upon the exercise of warrants to
purchase
our common stock.
|
(6) |
Includes
1,883,391 shares of our common stock, 748,060 shares of
common stock
issuable upon the exercise of a warrant to purchase our common
stock, and
124,997 shares of common stock issuable upon the exercise of options
to
purchase our common stock.
|
(7) |
Includes
11,375,254 shares of our common stock, 29,703,866 shares of common
stock
issuable upon the exercise of warrants to purchase our common stock,
and
124,997 shares of common stock issuable upon the exercise of options
to
purchase our common stock.
|
Bid
Price Per Share
|
|||
High
|
Low
|
||
2003
|
|||
April
1, 2003 - June 30, 2003
|
$0.04
|
$0.01
|
|
July
1, 2003 - September 30, 2003
|
$0.07
|
$0.01
|
|
October
1, 2003 - December 31, 2003
|
$0.04
|
$0.02
|
|
2004
|
|
|
|
January
1, 2004 - March 31, 2004
|
$0.13
|
|
$0.02
|
April
1, 2004 - June 30, 2004
|
$0.28
|
|
$0.10
|
July
1, 2004 - September 30, 2004
|
$0.27
|
$0.14
|
|
October
1, 2004 - December 31, 2004
|
$0.24
|
$0.15
|
|
2005
|
|
|
|
January
1, 2005 - March 31, 2005
|
$0.24
|
$0.17
|
|
April
1, 2005 - June 30, 2005
|
$0.38
|
$0.15
|
|
July
1, 2004 - September 15, 2004
|
$0.36
|
$0.24
|
Page(s)
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2005
|
F-2,
F-3
|
and
June 30, 2005
|
|
Condensed
Consolidated Statements of Operations for the
|
|
Three
Months Ended June 30, 2004 and 2005
|
F-4
|
Condensed
Consolidated Statements of Cash Flows for the
|
|
Three
Months Ended June 30, 2004 and 2005
|
F-5,
F-6
|
Notes
to Condensed Consolidated Financial Statements
|
F-7
to F-19
|
Report
of Independent Registered Public Accounting Firm
|
F-20
|
Consolidated
Balance Sheets as of March 31, 2005 and 2004
|
F-21,
F-22
|
Consolidated
Statements of Operations for the Years
|
|
Ended March 31, 2005 and 2004
|
F-23
|
Consolidated
Statements of Changes in Stockholders’ Equity
|
|
(Deficit)
for the Years Ended March 31, 2005 and 2004
|
F-24
|
Consolidated
Statements of Cash Flows for the Years Ended
|
|
March
31, 2005 and 2004
|
F-25,
F-26
|
Notes
to Consolidated Financial Statements
|
F-27
to F-52
|
ASSETS
|
|||||||
March
31,
|
June
30,
|
||||||
2005
|
2005
|
||||||
(audited)
|
(unaudited)
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,669,787
|
$
|
4,988,956
|
|||
Restricted
cash
|
429,954
|
418,193
|
|||||
Accounts
receivable, net
|
12,658,313
|
12,911,405
|
|||||
Investments,
at cost
|
450,000
|
450,000
|
|||||
Prepaid
expenses and other current assets
|
2,061,697
|
2,186,781
|
|||||
Total
Current Assets
|
20,269,751
|
20,955,335
|
|||||
Fixed
assets, net of accumulated depreciation
|
13,193,056
|
13,356,936
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill,
net of impairment
|
32,579,099
|
37,190,456
|
|||||
Customer
contracts and relationships
|
-
|
6,578,550
|
|||||
Other
intangible assets, net of amortization
|
4,476,461
|
4,150,456
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
806,667
|
|||||
Other
assets
|
1,277,897
|
2,164,378
|
|||||
39,360,124
|
50,890,507
|
||||||
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
85,202,778
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
March
31,
|
June
30,
|
||||||
2005
|
2005
|
||||||
(audited)
|
(unaudited)
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of convertible debenture
|
$
|
-
|
$
|
2,000,000
|
|||
Notes
payable under the Standby Equity Distribution Agreement ( the
"SEDA")
|
6,500,000
|
5,900,000
|
|||||
Current
portion of other notes payable
|
19,035,263
|
6,109,253
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
17,507,009
|
|||||
Liability
for common stock to be issued
|
-
|
1,809,373
|
|||||
Deferred
revenue
|
3,470,731
|
3,490,664
|
|||||
Total
Current Liabilities
|
48,869,082
|
36,816,299
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Convertible
debenture, net of unamortized debt discount of $802,725
|
-
|
12,697,275
|
|||||
Notes
payable and other long-term liabilities, net of current
maturities
|
999,196
|
1,661,816
|
|||||
Total
Long-Term Liabilities
|
999,196
|
14,359,091
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
51,175,390
|
|||||
MINORITY
INTEREST
|
600,000
|
3,675,000
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock, $.001 par value, 5,035,425 shares authorized
|
|||||||
and
35,378 shares issued and outstanding at March 31, 2005
|
|||||||
and
June 30, 2005
|
35
|
35
|
|||||
Common
stock, $.001 par value, 600,000,000 shares authorized
|
|||||||
and
355,918,011 and 373,978,011 shares issued and outstanding
|
|||||||
at
March 31, 2005 and June 30, 2005
|
355,918
|
373,978
|
|||||
Additional
paid-in capital
|
43,195,250
|
50,755,734
|
|||||
Accumulated
deficit, beginning of period
|
(15,836,828
|
)
|
(21,196,550
|
)
|
|||
Net
income (loss) for the period
|
(5,359,722
|
)
|
419,191
|
||||
Total
Stockholders' Equity
|
22,354,653
|
30,352,388
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
72,822,931
|
$
|
85,202,778
|
For
the Three Months Ended
|
|||||||
June
30,
|
|||||||
2004
|
2005
|
||||||
REVENUES
|
$
|
1,170,164
|
$
|
22,505,845
|
|||
COSTS
OF REVENUES
|
357,939
|
11,021,862
|
|||||
GROSS
PROFIT
|
812,225
|
11,483,983
|
|||||
OPERATING
EXPENSES
|
|||||||
Payroll,
professional fees and related expenses
|
910,051
|
3,678,652
|
|||||
Advertising
and marketing expenses
|
55,378
|
518,664
|
|||||
Office
rent and expenses
|
27,409
|
429,941
|
|||||
Travel
and entertainment expenses
|
32,974
|
117,265
|
|||||
Other
research and development costs
|
324
|
14,908
|
|||||
Other
general and administrative expenses
|
201,118
|
4,550,810
|
|||||
Depreciation
and amortization
|
39,944
|
822,377
|
|||||
Total
Operating Expenses
|
1,267,198
|
10,132,617
|
|||||
OPERATING
INCOME (LOSS)
|
(454,973
|
)
|
1,351,366
|
||||
INTEREST
EXPENSE, NET
|
(302,466
|
)
|
(932,175
|
)
|
|||
|
|||||||
INCOME
(LOSS) BEFORE PROVISION FOR INCOME TAXES
|
(757,439
|
)
|
419,191
|
||||
Provision
for Income Taxes
|
-
|
-
|
|||||
NET
INCOME (LOSS) APPLICABLE TO COMMON SHARES
|
$
|
(757,439
|
)
|
$
|
419,191
|
||
NET
INCOME (LOSS) PER SHARE
|
|||||||
Basic
|
$
|
(0.0033
|
)
|
$
|
0.0012
|
||
Diluted
|
$
|
(0.0033
|
)
|
$
|
0.0010
|
||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||
SHARES
OUTSTANDING
|
232,277,996
|
360,778,231
|
For
the Three Months Ended
|
|||||||
June
30,
|
|||||||
2004
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
income (loss)
|
$
|
(757,439
|
)
|
$
|
419,191
|
||
Adjustments
to reconcile net income (loss) to net cash
|
|||||||
(used
in) operating activities:
|
|||||||
Depreciation
and amortization
|
39,944
|
822,377
|
|||||
Noncash
interest expense
|
290,567
|
145,433
|
|||||
Common
stock issued for services
|
-
|
15,000
|
|||||
Investments
received for services
|
(150,000
|
)
|
-
|
||||
Changes
in assets and liabilities
|
|||||||
(Increase)
in accounts receivable
|
(90,157
|
)
|
(65,920
|
)
|
|||
(Increase)
decrease in other current assets
|
(50,928
|
)
|
53,665
|
||||
(Increase)
in other assets
|
-
|
(216,906
|
)
|
||||
Increase
(decrease) in accounts payable and
|
|||||||
and
accrued expenses
|
54,911
|
(2,542,829
|
)
|
||||
Increase
(decrease) in deferred revenue
|
(17,110
|
)
|
19,933
|
||||
Total
adjustments
|
77,227
|
(1,769,247
|
)
|
||||
Net
cash (used in) operating activities
|
(680,212
|
)
|
(1,350,056
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Cash
paid for acquisitions
|
(3,404,767
|
)
|
(5,849,646
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
25,987
|
748,412
|
|||||
Capital
expenditures, net
|
(68,054
|
)
|
(606,265
|
)
|
|||
Net
cash (used in) investing activities
|
(3,446,834
|
)
|
(5,707,499
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Borrowings
under convertible debenture
|
-
|
15,500,000
|
|||||
Repayment
of acquisition bridge loan
|
-
|
(13,000,000
|
)
|
||||
Borrowings
under the equity line of credit and the SEDA
|
4,000,000
|
2,200,000
|
|||||
Borrowings
under other notes payable
|
-
|
4,100,000
|
|||||
Debt
financing fees
|
-
|
(1,295,000
|
)
|
||||
SEDA
conversion fees
|
-
|
(315,000
|
)
|
||||
Increase
in other long-term liabilities
|
-
|
291,779
|
|||||
Payments
of notes payable
|
(55,721
|
)
|
(105,055
|
)
|
|||
Proceeds
from common stock issuances
|
23,999
|
-
|
|||||
Net
cash provided by financing activities
|
$
|
3,968,278
|
$
|
7,376,724
|
For
the Three Months Ended
|
|||||||
June
30,
|
|||||||
2004
|
2005
|
||||||
NET
INCREASE (DECREASE) IN
|
|||||||
CASH
AND CASH EQUIVALENTS
|
$
|
(158,768
|
)
|
$
|
319,169
|
||
CASH
AND CASH EQUIVALENTS - BEGINNING OF YEAR
|
1,955,607
|
4,669,787
|
|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
1,796,839
|
$
|
4,988,956
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|||||||
INFORMATION:
|
|||||||
Cash
paid during the period for interest
|
$
|
-
|
$
|
12,769
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH
|
|||||||
ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Conversion
of notes payable and accrued interest to common stock
|
$
|
2,800,000
|
$
|
8,335,188
|
|||
Acquisition
of WazAlliance
|
$
|
-
|
$
|
110,200
|
|||
Conversion
of payables to common stock
|
$
|
90,000
|
$
|
-
|
|||
Debt
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
-
|
|||
Transfer
of notes payable to the SEDA
|
$
|
-
|
$
|
7,200,000
|
|||
Goodwill
recorded in acquisitions
|
$
|
3,567,341
|
$
|
3,409,158
|
|||
Liability
for common stock to be issued
|
$
|
190,000
|
$
|
1,809,373
|
|||
Assumption
of AFN liabilities
|
$
|
-
|
$
|
1,549,784
|
|||
Amortization
of SEDA deferred financing fees
|
$
|
-
|
$
|
220,000
|
|||
Adjustment
to minority interest
|
$
|
-
|
$
|
150,000
|
|||
Note
payable in escrow
|
$
|
75,000
|
$
|
-
|
NOTE 1- |
ORGANIZATION
|
NOTE 2- |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
|
2004
|
2005
|
|||||
Net
income (loss), as reported
|
$
|
(
757,439
|
)
|
$
|
419,191
|
||
Add:
Stock-based employee compensation expense included in reported
net income
(loss)
|
-
|
-
|
|||||
Deduct:
Total stock-based employee compensation expense determined under
fair
value based method for all awards
|
(4,595,592
|
)
|
(1,820,768
|
)
|
|||
|
|
|
|||||
Pro
forma net loss
|
$
|
(5,353,031
|
)
|
$
|
(1,401,577
|
)
|
|
|
|
|
|||||
Net
income (loss) per share:
|
|
|
|||||
Diluted,
as reported
|
$
|
(0.0033
|
)
|
$
|
0.0010
|
||
|
|
|
|||||
Diluted,
pro forma
|
$
|
(0.0230
|
)
|
$
|
(0.0034
|
)
|
|
|
|
|
2004
|
2005
|
||||||
Dividend
yield
|
None
|
None
|
|||||
Expected
volatility
|
60
|
%
|
60
|
%
|
|||
Risk-free
interest rate
|
4.50
|
%
|
3.00
|
%
|
|||
Expected
term (in years)
|
9.58
|
10.00
|
Estimated
Useful
Lives
(in years)
|
March
31, 2005
|
June
30,
2005
|
||||||||
(audited)
|
(unaudited)
|
|||||||||
Furniture
and fixtures
|
7
|
$
|
387,861
|
$
|
397,563
|
|||||
Machinery
and equipment
|
5
|
13,584,088
|
14,277,462
|
|||||||
Leasehold
improvements
|
7
|
263,452
|
351,487
|
|||||||
Vehicles
|
5
|
287,733
|
287,732
|
|||||||
Subtotals
|
14,523,134
|
15,314,244
|
||||||||
Less
accumulated depreciation
|
(
1,330,078
|
)
|
(
1,957,308
|
)
|
||||||
Fixed
assets, net
|
$
|
13,193,056
|
$
|
13,356,936
|
March
31,
|
June
30,
|
||||||
2005
|
2005
|
||||||
(audited)
|
(unaudited)
|
||||||
Accounts
payable
|
$
|
17,250,586
|
$
|
14,943,656
|
|||
Accrued
compensation
|
1,675,124
|
1,874,915
|
|||||
Accrued
interest expense
|
937,378
|
688,438
|
|||||
Totals
|
$
|
19,863,088
|
$
|
17,507,009
|
NOTE 3- |
NOTES
PAYABLE
|
Convertible
debenture payable to Cornell Capital
|
$
|
15,500,000
|
||
Notes
payable to Cornell Capital (including $5,900,000 transferred
to the
SEDA)
|
10,000,000
|
|||
Notes
payable related to acquisitions
|
2,408,726
|
|||
Other
notes payable and long-term obligations
|
1,262,343
|
|||
29,171,069
|
||||
Less:
Unamortized debt discount on convertible debenture
|
(802,725
|
)
|
||
Less:
Amounts due within one year
|
(14,009,253
|
)
|
||
Long-term
portion of debt
|
$
|
14,359,091
|
The
twelve-month period ending--
|
||||
June
30, 2007
|
$
|
4,625,431
|
||
June
30, 2008
|
8,015,048
|
|||
June
30, 2009
|
2,515,048
|
|||
June
30, 2010
|
6,289
|
|||
15,161,816
|
||||
Less
- Unamortized debt discount on convertible debenture
|
(802,725
|
)
|
||
Long-term
portion of debt
|
$
|
14,359,091
|
NOTE 4- |
STOCKHOLDERS’
EQUITY
|
Number
of
|
Weighted-Average
|
||||||
Stock
Options --
|
Options
|
Exercise
Price
|
|||||
|
|||||||
Outstanding
- March 31, 2005
|
1,725,000
|
$
|
0.192
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
-
|
$
|
-
|
||||
Outstanding
- June 30, 2005
|
1,725,000
|
$
|
0.192
|
||||
Exercisable
- June 30, 2005
|
885,416
|
$
|
0.170
|
Number
of
|
Weighted-Average
|
||||||
Stock
Warrants --
|
Warrants
|
Exercise
Price
|
|||||
|
|||||||
Outstanding
- March 31, 2005
|
61,232,500
|
$
|
0.117
|
||||
Granted
|
18,850,000
|
$
|
0.296
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
-
|
$
|
-
|
||||
Outstanding
- June 30, 2005
|
80,082,500
|
$
|
0.159
|
||||
Exercisable
- June 30, 2005
|
58,153,275
|
$
|
0.163
|
NOTE 5- |
LIABILITY
FOR COMMON STOCK TO BE
ISSUED
|
NOTE 6- |
EARNINGS
PER SHARE
|
Net
income
|
$
|
419,191
|
||
Weighted
average number of shares outstanding during the period
|
360,778,231
|
|||
Add:
the treasury stock effect of stock options and warrants
|
39,571,209
|
|||
Add:
the effect of the assumed conversion of SEDA notes payable to
common
stock
|
11,157,620
|
|||
Add:
the effects of the assumed conversion of the debenture and notes
payable
|
1,941,180
|
|||
|
|
|||
Diluted
number of shares outstanding
|
413,448,241
|
|||
|
|
|||
Net
income per share:
|
|
|||
Basic
|
$
|
0.0012
|
||
Diluted
|
$
|
0.0010
|
NOTE 7- |
COMMITMENTS
|
NOTE 8- |
CONTINGENCIES
|
NOTE 9- |
SEGMENT
INFORMATION
|
The
Three Month Period
|
Voice
|
Internet
|
||||||||||||||
Ended
June 30, 2004
|
Services
|
Services
|
Technology
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
-
|
$
|
1,020,164
|
$
|
-
|
$
|
150,000
|
$
|
1,170,164
|
||||||
Costs
of revenues
|
-
|
357,939
|
-
|
-
|
357,939
|
|||||||||||
Gross
profit
|
-
|
662,225
|
-
|
150,000
|
812,225
|
|||||||||||
Operating
expenses
|
-
|
424,314
|
523,620
|
279,320
|
1,227,254
|
|||||||||||
Depreciation,
amortization
and
impairment charges
|
-
|
36,297
|
-
|
3,647
|
39,944
|
|||||||||||
Interest,
net
|
-
|
11,899
|
-
|
290,567
|
302,466
|
|||||||||||
Net
income (loss)
|
$
|
-
|
$
|
189,715
|
$
|
(523,620
|
)
|
$
|
(423,534
|
)
|
$
|
(757,439
|
)
|
|||
Total
assets
|
$
|
275,000
|
$
|
6,428,298
|
$
|
22,725
|
$
|
3,498,401
|
$
|
10,224,424
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
-
|
$
|
600,196
|
$
|
18,234
|
$
|
-
|
$
|
618,430
|
||||||
Goodwill,
net of impairment
|
$
|
-
|
$
|
4,462,469
|
$
|
-
|
$
|
-
|
$
|
4,462,469
|
The
Three Month Period
|
Voice
|
Internet
|
||||||||||||||
Ended
June 30, 2005
|
Services
|
Services
|
Technology
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
18,462,451
|
$
|
4,037,400
|
$
|
5,994
|
$
|
-
|
$
|
22,505,845
|
||||||
Costs
of revenues
|
9,054,032
|
1,956,024
|
11,806
|
-
|
11,021,862
|
|||||||||||
Gross
profit
|
9,408,419
|
2,081,376
|
(5,812
|
)
|
-
|
11,483,983
|
||||||||||
Operating
expenses
|
6,940,911
|
1,752,806
|
227,949
|
388,574
|
9,310,240
|
|||||||||||
Depreciation,
amortization
and
impairment charges
|
736,543
|
81,799
|
388
|
3,647
|
822,377
|
|||||||||||
Interest,
net
|
549
|
18,464
|
(74
|
)
|
913,236
|
932,175
|
||||||||||
Net
income (loss)
|
$
|
1,730,416
|
$
|
228,307
|
$
|
(234,075
|
)
|
$
|
(1,305,457
|
)
|
$
|
419,191
|
||||
Total
assets
|
$
|
35,744,527
|
$
|
17,960,916
|
$
|
8,082,405
|
$
|
23,414,931
|
$
|
85,202,778
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,729,485
|
$
|
1,366,679
|
$
|
257,127
|
$
|
3,645
|
$
|
13,356,936
|
||||||
Goodwill,
net of impairment
|
$
|
22,709,478
|
$
|
13,986,759
|
$
|
494,219
|
$
|
-
|
$
|
37,190,456
|
NOTE 10- |
SUBSEQUENT
EVENTS
|
ASSETS
|
|||||||
2005
|
2004
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,669,787
|
$
|
1,955,607
|
|||
Restricted
cash
|
429,954
|
-
|
|||||
Accounts
receivable, net
|
12,658,313
|
139,553
|
|||||
Investments,
at cost
|
450,000
|
-
|
|||||
Prepaid
expenses and other current assets
|
2,061,697
|
10,983
|
|||||
Total
Current Assets
|
20,269,751
|
2,106,143
|
|||||
Fixed
assets, net of depreciation
|
13,193,056
|
136,498
|
|||||
OTHER
ASSETS
|
|||||||
Other
assets
|
1,277,897
|
2,837
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
-
|
|||||
Customer
lists, net of amortization
|
114,311
|
-
|
|||||
Intangible
assets, net of amortization
|
3,343,628
|
-
|
|||||
Goodwill,
net of impairment
|
33,597,621
|
1,112,695
|
|||||
39,360,124
|
1,115,532
|
||||||
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
3,358,173
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|||||||
2005
|
2004
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of long-term debt and notes payable
|
$
|
19,035,263
|
$
|
63,633
|
|||
Notes
payable under the Standby Equity Distribution Agreement
|
6,500,000
|
-
|
|||||
Notes
payable under the Equity Line of Credit
|
-
|
1,800,000
|
|||||
Deferred
revenue
|
3,470,731
|
58,202
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
589,819
|
|||||
Total
Current Liabilities
|
48,869,082
|
2,511,654
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Long-term
debt and notes payable, net of current maturities
|
999,196
|
560,200
|
|||||
Total
Long-Term Liabilities
|
999,196
|
560,200
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
3,071,854
|
|||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|||||||
Preferred
stock, $.001 par value, 5,035,425 shares authorized
|
|||||||
and
35,378 shares issued and outstanding at March 31, 2005 and
2004
|
35
|
35
|
|||||
Common
stock, $.001 par value, 600,000,000 shares authorized
|
|||||||
and
355,918,011 and 220,493,159 shares issued and outstanding
|
|||||||
at
March 31, 2005 and 2004
|
355,918
|
220,493
|
|||||
Additional
paid-in capital
|
43,195,250
|
15,902,619
|
|||||
Accumulated
deficit
|
(21,196,550
|
)
|
(15,836,828
|
)
|
|||
Minority
interest
|
600,000 |
-
|
|||||
Total
Stockholders' Equity (Deficit)
|
22,954,653
|
286,319
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
72,822,931
|
$
|
3,358,173
|
2005
|
2004
|
||||||
REVENUES
|
$
|
46,508,144
|
$
|
311,355
|
|||
COSTS
OF REVENUES
|
22,551,240
|
117,349
|
|||||
GROSS
PROFIT
|
23,956,904
|
194,006
|
|||||
OPERATING
EXPENSES
|
|||||||
Professional
fees and compensation expenses
|
12,555,710
|
1,577,782
|
|||||
Advertising
and marketing expenses
|
1,610,285
|
36,995
|
|||||
Research
and development costs
|
30,324
|
1,620
|
|||||
General
and administrative expenses
|
10,018,298
|
186,599
|
|||||
Office
rent and expenses
|
952,475
|
105,142
|
|||||
Travel
and entertainment expenses
|
243,758
|
48,020
|
|||||
Depreciation
and amortization
|
2,067,213
|
21,000
|
|||||
Total
Operating Expenses
|
27,478,063
|
1,977,158
|
|||||
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
(3,521,159
|
)
|
(1,783,152
|
)
|
|||
OTHER
INCOME (EXPENSE)
|
|||||||
Amortization
of discount and interest on conversion of debt
|
(375,150
|
)
|
(353,342
|
)
|
|||
Interest
income
|
17,210 |
-
|
|||||
Other
income
|
111,089 |
-
|
|||||
Interest
expense
|
(1,591,712
|
)
|
(21,350
|
)
|
|||
Total
Other Income (Expense)
|
(1,838,563
|
)
|
(374,692
|
)
|
|||
|
|||||||
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
(5,359,722
|
)
|
(2,157,844
|
)
|
|||
Provision
for income taxes
|
-
|
-
|
|||||
NET
LOSS APPLICABLE TO COMMON SHARES
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
NET
LOSS PER BASIC AND DILUTED SHARES
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||
SHARES
OUTSTANDING
|
289,933,904
|
111,591,658
|
MOBILEPRO
CORP. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
|
FOR
THE YEARS ENDED MARCH 31, 2005 AND
2004
|
Additional
|
Stockholders'
|
||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Minority
|
Accumulated
|
Equity
|
||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Interest
|
Deficit
|
(Deficit)
|
||||||||||||||||||
BALANCE
- MARCH 31, 2003
|
35,378
|
$
|
35
|
30,175,122
|
$
|
30,175
|
$
|
11,538,979
|
$
|
-
|
$
|
(13,678,984
|
)
|
$
|
(2,109,795
|
)
|
|||||||||
|
|||||||||||||||||||||||||
Shares
issued as compensation
|
-
|
-
|
350,000
|
350
|
8,400
|
-
|
-
|
8,750
|
|||||||||||||||||
Shares
issued under MOU agreement
|
-
|
-
|
3,500,000
|
3,500
|
64,750
|
-
|
-
|
68,250
|
|||||||||||||||||
Shares
issued in conversion of debentures
|
-
|
-
|
16,130,887
|
16,131
|
190,454
|
-
|
-
|
206,585
|
|||||||||||||||||
Shares
issued in conversion of advances
|
-
|
-
|
17,057,971
|
17,058
|
171,942
|
-
|
-
|
189,000
|
|||||||||||||||||
Shares
issued in acquisition of DFW Internet Services, Inc.
|
-
|
-
|
18,761,726
|
18,762
|
231,238
|
-
|
-
|
250,000
|
|||||||||||||||||
Shares
issued under $10 million Equity Line of Credit
|
-
|
-
|
134,517,453
|
134,517
|
3,322,240
|
-
|
-
|
3,456,757
|
|||||||||||||||||
Accounts
payable settlements with vendors
|
-
|
-
|
-
|
-
|
374,616
|
-
|
-
|
374,616
|
|||||||||||||||||
Net
loss for the year ended March 31, 2004
|
-
|
-
|
-
|
-
|
-
|
-
|
(2,157,844
|
)
|
(2,157,844
|
)
|
|||||||||||||||
BALANCE
- MARCH 31, 2004
|
35,378
|
35
|
220,493,159
|
220,493
|
15,902,619
|
-
|
(15,836,828
|
)
|
286,319
|
||||||||||||||||
Shares
issued under $10 million Equity Line of Credit
|
-
|
-
|
10,000,000
|
10,000
|
4,031,691
|
-
|
-
|
4,041,691
|
|||||||||||||||||
Shares
issued pursuant to settlement agreement
|
-
|
-
|
2,000,000
|
2,000
|
88,000
|
-
|
-
|
90,000
|
|||||||||||||||||
Shares
issued for services related to SB-2 filing
|
-
|
-
|
8,000,000
|
8,000
|
1,752,000
|
-
|
-
|
1,760,000
|
|||||||||||||||||
Shares
issued for cash
|
-
|
-
|
421,037
|
421
|
23,578
|
-
|
-
|
23,999
|
|||||||||||||||||
Shares
issued for consulting
|
-
|
-
|
100,000
|
100
|
14,900
|
-
|
-
|
15,000
|
|||||||||||||||||
Shares
issued for cash
|
-
|
-
|
2,000,000
|
2,000
|
56,000
|
-
|
-
|
58,000
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued in acquisition of ShreveNet, Inc.
|
-
|
-
|
878,816
|
879
|
189,121
|
-
|
-
|
190,000
|
|||||||||||||||||
Shares
issued for cash
|
-
|
-
|
25,000
|
25
|
2,475
|
-
|
-
|
2,500
|
|||||||||||||||||
Shares
issued in acquisition of Affinity Telecom
|
-
|
-
|
5,000,000
|
5,000
|
-
|
-
|
-
|
5,000
|
|||||||||||||||||
Shares
issued in acquisition of CloseCall America, Inc.
|
-
|
-
|
39,999,999
|
40,000
|
9,960,000
|
-
|
-
|
10,000,000
|
|||||||||||||||||
Warrants
issued in acquisition of Davel Communications, Inc.
|
-
|
-
|
-
|
-
|
333,500
|
-
|
-
|
333,500
|
|||||||||||||||||
Terminated
put agreement with prior Affinity Telecom shareholders
|
-
|
-
|
-
|
-
|
995,000
|
-
|
-
|
995,000
|
|||||||||||||||||
Shares
issued for consulting
|
-
|
-
|
500,000
|
500
|
15,500
|
-
|
-
|
16,000
|
|||||||||||||||||
|
|||||||||||||||||||||||||
Shares
issued in acquisition of the assets of Web One, Inc.
|
-
|
-
|
1,500,000
|
1,500
|
298,500
|
-
|
-
|
300,000
|
|||||||||||||||||
Terminated
put agreement with prior DFW Internet Services, Inc.
shareholders
|
-
|
-
|
-
|
-
|
250,000
|
-
|
-
|
250,000
|
|||||||||||||||||
Shares
issued under $100 million Standby Equity Distribution
Agreement
|
-
|
-
|
65,000,000
|
65,000
|
9,282,366
|
-
|
-
|
9,347,366
|
|||||||||||||||||
Minority
interest in Davel acquisition
|
-
|
-
|
-
|
-
|
-
|
600,000
|
-
|
600,000
|
|||||||||||||||||
Net
loss for the year ended March 31, 2005
|
-
|
-
|
-
|
-
|
-
|
-
|
(5,359,722
|
)
|
(5,359,722
|
)
|
|||||||||||||||
BALANCE
- MARCH 31, 2005
|
35,378
|
$
|
35
|
355,918,011
|
$
|
355,918
|
$
|
43,195,250
|
$
|
600,000
|
$
|
(21,196,550
|
)
|
$
|
22,954,653
|
The
accompanying notes are an integral part of the consolidated
financial
statements.
|
2005
|
2004
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by
|
|||||||
(used
in) operating activities:
|
|||||||
Depreciation
and amortization
|
2,067,213 |
21,000
|
|||||
Common
stock issued for services and compensation
|
31,000
|
77,000
|
|||||
Investments
received for miscellaneous services
|
(450,000
|
)
|
-
|
|
|||
Amortization
of discount and interest on conversion of debt
|
375,150
|
353,342
|
|||||
Changes
in assets and liabilities
|
|||||||
(Increase)
decrease in other current assets
|
916,786
|
|
(1,465
|
)
|
|||
(Increase)
decrease in accounts receivable
|
(307,335
|
) |
17,215
|
|
|||
(Increase)
in other assets
|
(384,910
|
)
|
-
|
|
|||
Increase
(decrease) in deferred revenue
|
609,979
|
|
(8,222
|
)
|
|||
Increase
(decrease) in accounts payable and
|
|||||||
and
accrued expenses
|
3,155,408
|
|
(647,536
|
)
|
|||
Total
adjustments
|
6,013,291
|
|
(188,666
|
)
|
|||
Net
cash provided by (used in) operating activities
|
653,569
|
|
(2,346,510
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Cash
paid for acquisitions
|
(32,960,500
|
)
|
(350,000
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
5,827,223
|
47,756
|
|||||
Acquisition
of intangible assets
|
(1,192,608
|
)
|
-
|
|
|||
Capital
expenditures, net
|
(2,109,338
|
)
|
(999
|
)
|
|||
Net
cash (used in) investing activities
|
(30,435,223
|
)
|
(303,243
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from common stock issuances
|
84,499
|
-
|
|||||
Borrowings
under the equity line of credit, the standby equity
|
|||||||
distribution
agreement and other convertible debentures
|
17,700,000
|
4,785,000
|
|||||
Payments
of other convertible debentures
|
-
|
|
(50,000
|
)
|
|||
Change
in convertible debentures - officers, net
|
-
|
|
(97,617 |
)
|
|||
Proceeds
(payments) of long-term debt, net
|
14,711,335 |
|
(38,738
|
)
|
|||
Net
cash provided by financing activities
|
32,495,834
|
4,598,645
|
2005
|
2004
|
||||||
NET
INCREASE IN
|
|||||||
CASH
AND CASH EQUIVALENTS
|
2,714,180
|
1,948,892
|
|||||
CASH
AND CASH EQUIVALENTS -
|
|||||||
BEGINNING
OF YEAR
|
1,955,607
|
6,715
|
|||||
CASH
AND CASH EQUIVALENTS - END OF YEAR
|
$
|
4,669,787
|
$
|
1,955,607
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|||||||
INFORMATION:
|
|||||||
Cash
paid during the year for interest
|
$
|
533,050
|
$
|
-
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH
|
|||||||
ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Conversion
of notes payable to common stock
|
$
|
13,000,000
|
$
|
3,145,000
|
|||
Conversion
of other convertible debentures
|
$
|
-
|
$
|
206,585
|
|||
Conversion
of advances and payables to common stock
|
$
|
-
|
$
|
563,616
|
|||
Deferred
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
-
|
|||
Acquisition
of DFW Internet Services, Inc.
|
$
|
-
|
$
|
500,000
|
|||
Liability
for common stock to be issued
|
$
|
300,000
|
$
|
-
|
|||
Assignment
of bridge debentures receivable
|
$
|
1,000,000
|
$
|
-
|
|||
Goodwill
recorded in acquisitions
|
$
|
32,785,618
|
$
|
525,185
|
March 31,
2005
|
|
March
31, 2004
|
|||||
Net
loss
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
Weighted-average
common shares
|
|||||||
outstanding
(Basic)
|
289,933,904
|
111,591,658
|
|||||
Weighted-average
common stock
|
|||||||
equivalents
--
|
|||||||
Stock
options
|
-
|
-
|
|||||
Warrants
|
-
|
-
|
|||||
Weighted-average
common shares
|
|||||||
outstanding
(Diluted)
|
289,933,904
|
111,591,658
|
|||||
Net
loss per share, basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
2005
|
2004
|
|||||
|
|||||||
Accounts
payable
|
$
|
17,250,586
|
$
|
499,819
|
|||
|
|||||||
Accrued
compensation
|
1,675,124
|
90,000
|
|||||
|
|||||||
Accrued
interest expense
|
937,378
|
-
|
|||||
|
|||||||
Total
|
$
|
19,863,088
|
$
|
589,819
|
Estimated
Useful
Lives
(Years)
|
2005
|
|
2004
|
|||||||
Furniture
and fixtures
|
7
|
$
|
387,861
|
$
|
9,379
|
|||||
Machinery
and equipment
|
5
|
13,584,088
|
371,437
|
|||||||
Leasehold
improvements
|
7
|
263,452
|
2,141
|
|||||||
Vehicles
|
5
|
287,733
|
77,296
|
|||||||
Total
|
14,523,134
|
460,253
|
||||||||
Less
accumulated depreciation
|
1,330,078
|
323,755
|
||||||||
Property
and equipment, net
|
$
|
13,193,056
|
$
|
136,498
|
Note
payable to bank at $3,032 per month, including interest at
prime plus 1%
(6.75%) and maturing March 2006; secured by assets of World
Trade Network,
Inc.
|
$
36,964
|
|
Note
payable to a bank for a vehicle in the amount of $1,000 per
month,
including interest at 5.875%, secured by the CloseCall America,
Inc.
acquired vehicle.
|
37,745
|
|
Note
payable to a bank for expansion in the amount of $4,317 per
month,
including interest at 4.25%, secured by the CloseCall America,
Inc.
company’s corporate vehicle.
|
102,839
|
|
Note
payable to a company at $6,988 per month, including interest
at 7.50%;
secured by assets of the acquired company.
|
13,241
|
|
Note
payable to an individual at $1,473 per month, including interest
at 7.50%;
secured by assets of the acquired company.
|
12,872
|
|
203,661
|
||
Less:
Current maturities
|
(121,464
|
)
|
Long-term
bank debt
|
$
82,197
|
Years
Ending
March
31,
|
||||
2006
|
$
|
121,464
|
||
2007
|
60,203
|
|||
2008
|
15,245
|
|||
2009
|
6,749
|
|||
$
|
203,661
|
Years
Ended March 31,
|
||||
2006
|
$
|
11,754
|
||
2007
|
53,465
|
|||
Total
|
$
|
65,219
|
||
Computer
and mailing equipment
|
$
|
43,812
|
||
Less
- accumulated amortization
|
|
(10,728
|
)
|
|
$
|
33,084
|
Years
Ending
March
31,
|
Capital
Leases
|
Operating
Leases
|
|||||
2006
|
$
|
10,508
|
$
|
593,515
|
|||
2007
|
10,508
|
338,518
|
|||||
2008
|
4,068
|
245,344
|
|||||
2009
|
-
|
65,470
|
|||||
2010
|
-
|
55,354
|
|||||
Total
minimum lease payments
|
25,084
|
$
|
1,298,201
|
||||
Less
- amounts representing interest
|
(4,215
|
)
|
|||||
Less
- current portion
|
(5,354
|
)
|
|||||
Long-term
capital lease obligation
|
$
|
15,515
|
Weighted-Average
|
|||||||
Number
of Options |
Exercise
Price
|
||||||
|
|||||||
Outstanding
- beginning of period
|
4,171,037
|
$
|
.0482
|
||||
Granted
|
5,225,000
|
.1748
|
|||||
Exercised
|
(446,037
|
)
|
.0594
|
||||
Cancelled
|
(7,225,000
|
)
|
.1047
|
||||
Outstanding
- end of period
|
1,725,000
|
.1920
|
|||||
Exercisable
- end of period
|
722,917
|
$
|
.1635
|
Weighted-Average
|
|||||||
Number
of Options |
Exercise
Price
|
||||||
|
|||||||
Outstanding
- beginning of period
|
521,037
|
$
|
.123
|
||||
Granted
|
4,000,000
|
.036
|
|||||
Exercised
|
(350,000
|
)
|
.02
|
||||
Cancelled
|
-
|
-
|
|||||
Outstanding
- end of period
|
4,171,037
|
.0482
|
|||||
Exercisable
- end of period
|
2,454,787
|
$
|
.0458
|
2005
|
2004
|
||||||
|
|||||||
Net
loss as reported
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
Total
stock-based employee compensation expense determined under
fair value
based method for all awards, net of related tax effects
|
(1,652,185
|
)
|
(156,889
|
)
|
|||
Pro
forma net loss
|
$
|
(7,011,907
|
)
|
$
|
(2,314,733
|
)
|
|
Net
loss per share:
|
|||||||
As
reported:
|
|||||||
Basic
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
Diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
Pro
forma:
|
|||||||
Basic
|
$
|
(0.024
|
)
|
$
|
(0.02
|
)
|
|
Diluted
|
$
|
(0.024
|
)
|
$
|
(0.02
|
)
|
Exercise
Price
|
Expiration
Date
|
2005
|
2004
|
|||||||
$.30
|
|
|
October,
2009
|
|
|
2,500,000
|
|
|
-
|
|
$.35
|
|
|
October,
2009
|
|
|
1,000,000
|
|
|
-
|
|
$.30
|
|
|
November,
2009
|
|
|
5,000,000
|
|
|
-
|
|
$.15
|
|
|
February,
2010
|
|
|
200,000
|
|
|
-
|
|
$.20
|
|
|
November,
2011
|
|
|
5,600,000
|
|
|
-
|
|
$.032
|
|
|
September,
2013
|
|
|
-
|
|
|
500,000
|
|
$.018
|
|
|
January,
2014
|
|
|
6,500,000
|
|
|
6,500,000
|
|
$.02
|
|
|
January,
2014
|
|
|
3,400,000
|
|
|
-
|
|
$.10
|
|
|
March,
2014
|
|
|
800,000
|
|
|
-
|
|
$.018
|
|
|
April,
2014
|
|
|
21,182,500
|
|
|
-
|
|
$.20
|
|
|
June,
2014
|
|
|
4,300,000
|
|
|
-
|
|
$.18
|
|
|
July,
2014
|
|
|
2,000,000
|
|
|
-
|
|
$.20
|
|
|
July,
2014
|
|
|
1,000,000
|
|
|
-
|
|
$.20
|
|
|
November,
2014
|
|
|
2,000,000
|
|
|
-
|
|
$.16
|
|
|
January,
2015
|
|
|
3,000,000
|
|
|
-
|
|
$.17
|
|
|
January,
2015
|
|
|
2,000,000
|
|
|
-
|
|
$.185
|
|
|
January,
2015
|
|
|
500,000
|
|
|
-
|
|
$.193
|
|
|
February,
2015
|
|
|
250,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
61,232,500
|
|
|
7,000,000
|
|
Weighted
average exercise price
|
|
$
|
0.117
|
|
$
|
0.019
|
|
Voice
|
Internet
|
|||||||||||||||
Corporate
|
Technology
|
Services
|
Services
|
Total
|
||||||||||||
Revenues
|
$
|
615,000
|
$
|
-
|
$
|
32,009,084
|
$
|
13,884,060
|
$
|
46,508,144
|
||||||
Direct
costs of revenues
|
-
|
-
|
15,816,901
|
6,734,339
|
22,551,240
|
|||||||||||
Gross
profit
|
615,000
|
-
|
16,192,183
|
7,149,721
|
23,956,904
|
|||||||||||
Operating
expenses
|
1,287,945
|
953,976
|
16,707,959
|
6,460,970
|
25,410,850
|
|||||||||||
Depreciation,
amortization and impairment
|
1,108,483
|
14,588
|
1,093,620
|
225,672
|
2,442,363
|
|||||||||||
Other
income
|
-
|
-
|
111,089
|
-
|
111,089
|
|||||||||||
Interest
(net)
|
1,393,108
|
43,927
|
23,523
|
113,944
|
1,574,502
|
|||||||||||
Net
income (loss)
|
$
|
(3,174,536
|
)
|
$
|
(1,012,491
|
)
|
$
|
(1,521,830
|
)
|
$
|
349,135
|
$
|
(5,359,722
|
)
|
||
Segment
assets
|
$
|
19,522,552
|
$
|
14,240
|
$
|
35,166,195
|
$
|
18,119,944
|
$
|
72,822,931
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
-
|
$
|
7,293
|
$
|
11,804,050
|
$
|
1,381,713
|
$
|
13,193,056
|
Voice
|
Internet
|
|||||||||||||||
Corporate
|
Technology
|
Services
|
Services
|
Total
|
||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
311,355
|
$
|
311,355
|
||||||
Direct
costs of revenues
|
-
|
-
|
-
|
117,349
|
117,349
|
|||||||||||
Gross
profit
|
-
|
-
|
-
|
194,006
|
194,006
|
|||||||||||
Operating
expenses
|
701,758
|
1,115,946
|
-
|
138,454
|
1,956,158
|
|||||||||||
Depreciation,
amortization and impairment
|
353,342
|
14,589
|
-
|
6,411
|
374,342
|
|||||||||||
Interest
(net)
|
-
|
18,745
|
-
|
2,605
|
21,350
|
|||||||||||
Net
income (loss)
|
$
|
(1,055,100
|
)
|
$
|
(1,149,280
|
)
|
$
|
-
|
$
|
46,536
|
$
|
(2,157,844
|
)
|
|||
-
|
||||||||||||||||
Segment
assets
|
$
|
1,877,378
|
$
|
29,151
|
$
|
-
|
$
|
1,451,644
|
$
|
3,358,173
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
-
|
$
|
21,881
|
$
|
-
|
$
|
114,617
|
$
|
136,498
|
We
have not authorized any dealer, salesperson or other person to
provide any
information or make any representations about Mobilepro Corp. except
the
information or representations contained in this Prospectus. You
should
not rely on any additional information or representations if
made.
|
|
-----------------------
|
|
This
Prospectus does not constitute an offer to sell, or a solicitation
of an
offer to buy any securities:
· except
the common
stock offered by this Prospectus;
· in
any jurisdiction in which the offer or solicitation is not
authorized;
· in
any jurisdiction where the dealer or other salesperson is not qualified
to
make the offer or solicitation;
· to
any person to whom it is unlawful to make the offer or solicitation;
or
· to
any person who is not a United States resident or who is outside
the
jurisdiction of the United States.
The
delivery of this Prospectus or any accompanying sale does not imply
that:
· there
have been no changes in the affairs of Mobilepro Corp. after the
date of
this Prospectus; or
· the
information contained in this Prospectus is correct after the date
of this
Prospectus.
|
----------------------
PROSPECTUS
---------------------
123,732,939
Shares of Common Stock
MOBILEPRO
CORP.
September
__,
2005
|
-----------------------
|
|
|
Securities
and Exchange Commission Registration Fee
|
$
|
4,000
|
||
Printing
and Engraving Expenses
|
5,000
|
|||
Accounting
Fees and Expenses
|
2,500
|
|||
Legal
Fees and Expenses
|
30,000
|
|||
Miscellaneous
|
|
5,000
|
||
TOTAL
|
$
|
46,500
|
Exhibit
No.
|
Description
|
Location
|
2.1
|
Agreement
and Plan of Merger, dated as of March 21, 2002, by and
among
Mobilepro Corp., NeoReach Acquisition Corp. and NeoReach,
Inc.
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed on April 5, 2002
|
2.2
|
Agreement
and Plan of Merger, dated as of January 20, 2004, by and among
Mobilepro
Corp., DFWI Acquisition Corp., DFW Internet Services, Inc., Jack
W. Beech,
Jr. and Jack W. Beech, Sr.
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on
Form 8-K filed on February 4, 2004
|
2.3
|
Agreement
and Plan of Merger, dated as of March 1, 2004, by and among DFW
Internet
Services, Inc., DFW Internet Acquisition Corp., Internet Express,
Inc., J.
Glenn Hughes and Loretta Hughes
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on
Form 8-K filed on April 29, 2004
|
2.4
|
Agreement
and Plan of Merger, dated as of April 21, 2004, by and among
DFW Internet
Services, Inc., DFWA Acquisition Corp., August.Net Services,
LLC, Louis G.
Fausak, Andrew K. Fullford, John M. Scott, Dennis W. Simpson,
Andrew T.
Fausak, and Gayane Manasjan
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on
Form 8-K filed on April 29, 2004
|
2.5
|
Agreement
and Plan of Merger, dated as of June 3, 2004, by and among Mobilepro
Corp., DFW Internet Services, Inc., DFWS Acquisition Corp., ShreveNet,
Inc. and the stockholders identified therein
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on June 8, 2004
|
2.6
|
Asset
Purchase Agreement, dated as of June 21, 2004, by and among Crescent
Communications, Inc. and DFW Internet Services, Inc.
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on June 22, 2004
|
2.7
|
Agreement
and Plan of Merger, dated July 6, 2004, by and among the Company,
DFW
Internet Services, Inc., DFWC Acquisition Corp., Clover Computer
Corp. and
Paul Sadler
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on July 8, 2004
|
2.8
|
Agreement
and Plan of Merger, dated July 14, 2004, by and among DFW Internet
Services, Inc., DFWT Acquisition Corp., Ticon.net, Inc. and the
stockholders identified therein
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on July 15, 2004
|
2.9
|
Agreement
and Plan of Merger, dated July 30, 2004, by and among the Company,
Affinity Acquisition Corp., C.L.Y.K., Inc. and the stockholders
identified
therein
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on August 20, 2004
|
2.10
|
Amendment
No. 1 to Agreement and Plan of Merger, dated December 28, 2004,
by and
among the Company, Affinity Acquisition Corp., C.L.Y.K., Inc.
and the
stockholders identified therein
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on January 21, 2005
|
2.11
|
Asset
Purchase Agreement, dated as of August 13, 2004, by and among
Web One,
Inc., DFW Internet Services, Inc. and Jeff McMurphy
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on August 19, 2004
|
2.12
|
Agreement
and Plan of Merger, dated August 31, 2004, by and among the Company,
MVCC
Acquisition Corp. and CloseCall America, Inc.
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on October 19, 2004
|
2.13
|
Amendment
No. 1 to Agreement and Plan of Merger, dated September 30, 2004,
by and
among the Company, MVCC Acquisition Corp. and CloseCall America,
Inc.
|
Incorporated
by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K
filed on October 19, 2004
|
2.14
|
Loan
Purchase Agreement and Transfer and Assignment of Shares, dated
September
3, 2004, by and among the Company, Davel Acquisition Corp., Davel
Communications, Inc. and certain stockholders identified
therein
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on September 9, 2004
|
2.15
|
Agreement
and Plan of Merger, dated September 15, 2004, by and among the
Company,
DFWW Acquisition Corp., World Trade Network, Inc. and Jack
Jui
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on September 15, 2004
|
2.16
|
Agreement
and Plan of Merger, dated September 16, 2004, by and among the
Company,
DFW Internet Services, Inc., DFWR Acquisition Corp., The River
Internet
Access Co. and the stockholders identified therein
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on September 17, 2004
|
2.17
|
Agreement
and Plan of Merger, dated June 30, 2005, by and among the Company,
AFN
Acquisition Corp., American Fiber Network, Inc. and the individuals
and
entities identified therein
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on July 6, 2005
|
3.1
|
Certificate
of Incorporation, dated April 20, 2001, of Registrant
|
Incorporated
by reference to Exhibit 3.1 to the Registrant’s Registration Statement on
Form S-8 filed on May 11, 2001
|
3.2
|
Certificate
of Amendment of Certificate of Incorporation of Mobilepro Corp
dated
November 16, 2001.
|
Incorporated
by reference to Exhibit 3.1 to the Registrant’s Registration Statement on
Form S-8 filed on December 4, 2001
|
3.3
|
Certificate
of Amendment to Certificate of Incorporation of Mobilepro Corp.
dated
March 11, 2003
|
Incorporated
by reference to Exhibit 3.11 to the Registrant’s Registration Statement on
Form SB-2 filed on May 6, 2003
|
3.4
|
By-Laws
of Registrant
|
Incorporated
by reference to Exhibit 3.2 to the Registrant’s Registration Statement on
Form S-8 filed on May 11, 2001
|
4.1
|
2001
Equity Performance Plan
|
Incorporated
by reference to Exhibit 4.1 to the Registrant’s Registration Statement on
Form S-8 filed on December 4, 2001
|
4.2
|
Amended
and Restated 2001 Equity Performance Plan
|
Incorporated
by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2004
|
4.3
|
Registration
Rights Agreement, dated September 16, 2004, by and among the
Company and
the persons and entities identified therein
|
Incorporated
by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
4.4
|
Registration
Rights Agreement, dated November 15, 2004, by and among the Company
and
the persons and entities identified therein
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Current Report on Form
8-K filed on November 17, 2004
|
4.5
|
Form
of Warrant issued on November 15, 2004
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Current Report on Form
8-K filed on November 17, 2004
|
4.6
|
Registration
Rights Agreement, dated June 30, 2005, by and among the Company
and the
persons and entities identified therein
|
Incorporated
by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K
filed on July 6, 2005
|
5.1
|
Opinion
on Legality
|
Provided
herewith
|
10.1
|
Memorandum
of Understanding between NeoReach, Inc., and RF Microelectronics
Laboratory of Information and Communications University, South
Korea dated
July 31, 2002 for opportunities to cooperate in research, particularly
in
RF-CMOS ASICs development for RF transceiver of third generation
W-CDMA
standard.
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s amended Quarterly Report
on Form 10-QSB/A filed on October 4, 2002
|
10.2
|
Termination
Agreement dated November 26, 2003, between Arne Dunhem
and Mobilepro
Corp.
|
Incorporated
by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form
10-Q filed on February 13, 2004.
|
10.3
|
Amendment
No. 1 to Termination Agreement, dated December 30, 2003, between
Arne
Dunhem and Mobilepro Corp.
|
Incorporated
by reference to Exhibit 10.17 to the Post-Effective Amendment
to
Registrant’s Registration Statement on Form SB-2 filed on May 13,
2004.
|
10.4
|
Amendment
No. 2 to Termination Agreement, dated April 8, 2004, between
Arne Dunhem
and Mobilepro Corp.
|
Incorporated
by reference to Exhibit 10.18 to the Post-Effective Amendment
to
Registrant’s Registration Statement on Form SB-2 filed on May 13,
2004.
|
10.5
|
Amendment
No. 3 to Termination Agreement, dated May 2, 2004, between Arne
Dunhem and
Mobilepro Corp.
|
Incorporated
by reference to Exhibit 10.19 to the Post-Effective Amendment
to
Registrant’s Registration Statement on Form SB-2 filed on May 13,
2004.
|
10.6
|
Executive
Employment Agreement, dated December 15, 2003, between Jay O.
Wright and
the Company
|
Incorporated
by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form
10-QSB filed on February 13, 2004.
|
10.7
|
Executive
Employment Agreement, dated April 15, 2004 between Jay O. Wright
and the
Company
|
Incorporated
by reference to Exhibit 10.15 to the Amendment to Registrant’s
Registration Statement on Form SB-2 filed on May 14, 2004.
|
10.8
|
Amended
and Restated Executive Employment Agreement, dated June 9, 2004
between
Jay O. Wright and the Company
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on June 15, 2004
|
10.9
|
Executive
Employment Agreement, dated February 20, 2004 between Kurt Gordon
and the
Company
|
Incorporated
by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2004
|
10.10
|
Standby
Equity Distribution Agreement, dated May 13, 2004 between the
Company and
Cornell Capital
|
Incorporated
by reference to Exhibit 10.20 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004.
|
10.11
|
Registration
Rights Agreement, dated May 13, 2004 between the Company and
Cornell
Capital
|
Incorporated
by reference to Exhibit 10.21 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004.
|
10.12
|
Placement
Agent Agreement, dated May 13, 2004 between the Company and Newbridge
Securities Corporation
|
Incorporated
by reference to Exhibit 10.22 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004.
|
10.13
|
Escrow
Agreement, dated May 13, 2004 between the Company and Cornell
Capital
|
Incorporated
by reference to Exhibit 10.23 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004.
|
10.14
|
Consulting
Agreement by and among Mobilepro Corp., DFW Internet Services,
Inc., Beech
Holdings, Inc. and Jack W. Beech, Jr.
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on
Form 8-K filed on February 4, 2004
|
10.15
|
Executive
Employment Agreement dated June 10, 2004 between Kevin Kuykendall
and
Mobilepro Corp.
|
Incorporated
by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2004
|
10.16
|
Amended
and Restated Executive Employment Agreement dated October 14,
2004,
between Kevin Kuykendall and the Company
|
Incorporated
by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.17
|
Development
Agreement by and among the Company, NeoReach, Inc. and Information
and
Communications University*
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.18
|
Promissory
Note issued by the Company to Cornell Capital on August 23,
2004
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.19
|
Security
Agreement between the Company and Cornell Capital dated August
23,
2004
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.20
|
Promissory
Note issued by the Company to Cornell Capital on August 25,
2004
|
Incorporated
by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.21
|
Security
Agreement between the Company and Cornell Capital dated August
25,
2004
|
Incorporated
by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.22
|
Letter
Agreement between the Company and Cornell Capital dated August
27,
2004
|
Incorporated
by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.23
|
Promissory
Note issued by the Company to Cornell Capital on August 27,
2004
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Current Report on Form
8-K filed on October 19, 2004
|
10.24
|
Security
Agreement between the Company and Cornell Capital dated August
27,
2004
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Current Report on Form
8-K filed on October 19, 2004
|
10.25
|
Promissory
Note issued by the Company to Cornell Capital on September 22,
2004
|
Incorporated
by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.26
|
Security
Agreement between the Company and Cornell Capital dated September
22,
2004
|
Incorporated
by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
10.27
|
Executive
Employment Agreement by and among the Company, CloseCall America,
Inc. and
Tom Mazerski
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on October 19, 2004
|
10.28
|
Executive
Employment Agreement dated November 2, 2004, between Geoffrey
Amend and
the Company
|
Incorporated
by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form
10-QSB filed on February 14, 2005
|
10.29
|
Executive
Employment Agreement dated December 1, 2004, between Bruce Sanguinetti
and
the Company
|
Incorporated
by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form
10-QSB filed on February 14, 2005
|
10.30
|
Credit
Agreement, dated November 15, 2004, by and among the Company,
Davel
Acquisition Corp. and Airlie Opportunity Master Fund, Ltd.
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on November 17, 2004
|
10.31
|
Executive
Employment Agreement dated December 15, 2004, between John Dumbleton
and
the Company
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on December 17, 2004
|
10.32
|
Employment
Agreement dated February 28, 2005 between Davel Communications,
Inc. and
Tammy L. Martin
|
Incorporated
by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.33
|
Amendment
No. 1 to Employment Agreement between Davel Communications, Inc.
and Tammy
L. Martin, dated April 20, 2005
|
Incorporated
by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.34
|
Amendment
No. 2 to Employment Agreement between Davel Communications, Inc.
and Tammy
L. Martin, dated May 26, 2005
|
Incorporated
by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.35
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
between
Jay O. Wright and the Company
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on June 20, 2005
|
10.36
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
between
Kurt Gordon and the Company
|
Incorporated
by reference to Exhibit 10.32 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.37
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
by and
among the Company, CloseCall America, Inc. and Tom Mazerski
|
Incorporated
by reference to Exhibit 10.33 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.38
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005,
between
Geoffrey Amend and the Company
|
Incorporated
by reference to Exhibit 10.34 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.39
|
Securities
Purchase Agreement, dated as of May 13, 2005, by and between
the Company
and Cornell Capital
|
Incorporated
by reference to Exhibit 10.35 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.40
|
Secured
Convertible Debenture, issued on May 13, 2005 by the Company
to Cornell
Capital
|
Incorporated
by reference to Exhibit 10.36 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.41
|
Amended
and Restated Collateral Assignment of Intellectual Property Rights,
made
as of May 13, 2005, by and among the Company, the Company subsidiaries
identified therein and Cornell Capital
|
Incorporated
by reference to Exhibit 10.37 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.42
|
Amended
and Restated Security Agreement, dated as of May 13, 2005, by
and among
the Company, the Company subsidiaries identified therein and
Cornell
Capital
|
Incorporated
by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.43
|
Investor
Registration Rights Agreement, dated as of May 13, 2005 by and
between the
Company and Cornell Capital
|
Incorporated
by reference to Exhibit 10.39 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.44
|
Amended
and Restated Guaranty Agreement, dated as of May 13, 2005, made
by each of
the direct and indirect subsidiaries of the Company in favor
Cornell
Capital
|
Incorporated
by reference to Exhibit 10.40 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.45
|
Warrant
issued by the Company to Cornell Capital
|
Incorporated
by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
10.46
|
Executive
Employment Agreement dated September 1, 2005, between James L.
Magruder,
Jr. and the Company
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed September 9, 2005.
|
21.1
|
Subsidiaries
of Registrant
|
Incorporated
by reference to Exhibit 21.1 to the Registrant’s Quarterly Report on Form
10-QSB filed August 15, 2005.
|
23.1
|
Consent
of Bagell, Josephs & Company, L.L.C.
|
Provided
herewith
|
23.2
|
Consent
of Schiff Hardin LLP
|
Provided
herewith (see Exhibit 5.1)
|
SIGNATURE
|
TITLE
|
DATE
|
||
|
||||
|
||||
/s/ Jay O. Wright |
President,
Chief Executive Officer,
|
September
29, 2005
|
||
Jay
O. Wright
|
Principal
Executive Officer and Director
|
|||
|
||||
/s/ Kurt Gordon |
Chief
Financial Officer, Principal Financial and Principal Accounting
Officer
|
September
29, 2005
|
||
Kurt
Gordon
|
|
|||
|
||||
/s/ Jack W. Beech |
Director
|
September
29, 2005
|
||
Jack
W. Beech
|
|
|||
/s/ Chris MacFarland |
Director
|
September
29, 2005
|
||
Chris
MacFarland
|
||||
/s/ Michael G. O’Neil |
Director
|
September
29, 2005
|
||
Michael
G. O’Neil
|
||||
/s/ Don Sledge |
Director
|
September
29, 2005
|
||
Don
Sledge
|