|
|
|
|
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 Boulevard, Suite 202
|
|
Jay
O. Wright, Chief Executive Officer
|
|
Bethesda,
MD 20817
|
|
Mobilepro
Corp.
|
|
(301)
315-9040
|
|
6701
Democracy Boulevard, Suite 202
|
|
(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
|
Proposed
Maximum
Aggregate
Offering
Price
|
Amount
Of
Registration
Fee
|
||
Common
stock, par value $0.001 per share
|
115,213,110
|
Shares
|
$0.262(1)
|
$30,185,835(1)
|
$3,552.87
|
(1) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933. For purposes of this table, we have used the closing price of our common stock on September 27, 2005. |
SUMMARY
OF THE COMPANY
|
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
|
42
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
43
|
|
MANAGEMENT
|
54
|
|
LEGAL
PROCEEDINGS
|
62
|
|
PRINCIPAL
STOCKHOLDERS
|
63
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
65
|
|
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS
|
65
|
|
DESCRIPTION
OF SECURITIES
|
66
|
|
EXPERTS
|
67
|
|
LEGAL
MATTERS
|
67
|
|
AVAILABLE
INFORMATION
|
67
|
|
FINANCIAL
STATEMENTS
|
F-1
|
Wireless
Networks
|
Our
broadband wireless network deployment efforts are being conducted
by our
wholly-owned subsidiary, NeoReach, Inc., (“NeoReach”), and its subsidiary,
NeoReach Wireless, Inc. (“NeoReach Wireless”). This segment also includes
the operations of Kite Broadband LLC, (“Kite”), a wireless broadband
Internet service provider located in Ridgeland,
Mississippi.
|
Voice
Services
|
Our
voice services segment is led by CloseCall America, Inc. (“CloseCall”), a
Competitive Local Exchange Carrier (“CLEC”, which
is a term applied under the Telecommunications Act of 1996
to new local
telephone companies intended to compete with the incumbent
local telephone
companies) 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/or Internet
services throughout the United States. Davel is one of the
largest
independent payphone operators in the United States, providing
approximately 57% of the revenues of the voice services segment
in the
nine months ended December 31, 2005.
|
Internet
Services
|
Our
internet services segment is led by DFW Internet Services,
Inc. (“DFW”,
doing business as Nationwide Internet), an Internet services
provider
(“ISP”) based in Irving, Texas, its acquired Internet service provider
subsidiaries and InReach Internet, L.L.C, (“InReach”), a full service ISP
located in Stockton, California that we acquired on November
1, 2005. Our
Internet services segment provides dial-up and broadband Internet
access, web-hosting services and related Internet services
to business and
residential customers in over 40 states. Over 80% of our ISP
customers
subscribe to our dial-up service.
|
Corporate
|
Our
corporate reporting segment serves as the holding company of
the operating
subsidiaries that are divided among the other three business
reporting
segments, provides senior executive and financial management,
and performs
corporate-level accounting, financial reporting and legal functions.
Occasionally, its employees may provide services to customers
resulting in
the recognition of consulting service revenues.
|
Fiscal
Year Ended
March 31, 2005 |
Nine Months Ended
December 31, 2005 |
||||||||||||
Business
Segment
|
$s
|
%
of Revenues
|
$s
|
%
of Revenues
|
|||||||||
Voice
|
$
|
32,009,084
|
68.8
|
%
|
$
|
56,301,164
|
74.8
|
%
|
|||||
Internet
Services
|
13,884,060
|
29.9
|
12,395,635
|
16.5
|
|||||||||
Wireless
Networks
|
—
|
—
|
6,600,302
|
8.7
|
|||||||||
Corporate
|
615,000
|
1.3
|
—
|
—
|
|||||||||
Total
Revenues
|
$
|
46,508,144
|
100.0
|
%
|
$
|
75,297,101
|
100.0
|
%
|
·
|
The
holder of 10,000,000 shares of common stock that were issued to
the former
owner in connection with our acquisition of AFN.
|
·
|
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 1,307,870 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 holds a debenture that is convertible
into
50,000,000 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.
|
·
|
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.
|
·
|
Certain
holders of warrants to purchase collectively up to 3,223,625 shares
of our
common stock that were issued to the former owners in connection
with our
acquisition of CloseCall.
|
·
|
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 and options to purchase an aggregate
of 31,281,615 shares of our common stock that were issued to current
and former employees, consultants, advisors and directors.
|
Common
Stock Offered
|
115,213,110
shares of our common stock by selling stockholders (the number
of shares
being registered in this offering will represent approximately
17.42% of
the total number of shares of common stock outstanding upon
their
issuance).
|
Offering
Price
|
Market
price.
|
||
|
|
||
Common
Stock Outstanding Before the Offering
|
560,666,950 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 Nine
Months
Ended
December
31, 2004
|
For
the Nine
Months
Ended
December
31, 2005
|
||||||||||
Statement
of Operations Data:
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
Revenues
|
$
|
311,355
|
$
|
46,508,144
|
$
|
23,265,366
|
$
|
75,297,101
|
|||||
|
|||||||||||||
Operating
Costs and Expenses
|
2,094,507
|
50,029,303
|
27,493,176
|
78,903,939
|
|||||||||
|
|||||||||||||
Operating
Loss
|
(1,783,152
|
)
|
(3,521,159
|
)
|
(4,227,816
|
)
|
(3,606,838
|
)
|
|||||
|
|||||||||||||
Other
Income (Expenses)
|
(374,692
|
)
|
(1,838,563
|
)
|
(1,232,280
|
)
|
(2,213,295
|
)
|
|||||
|
|||||||||||||
Minority
Interests
|
—
|
—
|
—
|
(192,507
|
)
|
||||||||
Net
Loss Applicable to Common Shares
|
$
|
(2,157,844
|
)
|
$
|
(5,359,722
|
)
|
$
|
(5,460,090
|
)
|
$
|
(6,012,640
|
)
|
|
|
|||||||||||||
Net
Loss Per Share
|
|||||||||||||
Basic
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
|
|
|||||||||||||
Diluted
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
March
31,
2004 |
March
31,
2005
|
December
31,
2005
|
||||||||
Balance
Sheet Data:
|
|
|
|
|||||||
|
|
|
|
|||||||
Assets
|
|
|
|
|||||||
Cash
and Cash Equivalents
|
$
|
1,955,607
|
$
|
4,669,787
|
$
|
4,960,703
|
||||
|
||||||||||
Total
Current Assets
|
$
|
2,106,143
|
$
|
20,269,751
|
$
|
20,415,289
|
||||
|
||||||||||
Total
Non-Current Assets
|
1,252,030
|
52,553,180
|
62,971,598
|
|||||||
|
||||||||||
Total
Assets
|
$
|
3,358,173
|
$
|
72,822,931
|
$
|
83,386,887
|
||||
|
||||||||||
Liabilities
|
||||||||||
Total
Current Liabilities
|
$
|
2,511,654
|
$
|
48,869,082
|
$
|
31,686,396
|
||||
|
||||||||||
Total
Long-Term Liabilities
|
560,200
|
999,196
|
11,698,207
|
|||||||
|
||||||||||
Total
Liabilities
|
3,071,854
|
49,868,278
|
43,384,603
|
|||||||
|
||||||||||
Minority
Interests
|
—
|
600,000
|
3,799,605
|
|||||||
|
||||||||||
Total
Stockholders’ Equity
|
286,319
|
22,354,653
|
36,202,679
|
|||||||
|
||||||||||
Total
Liabilities and Stockholders’ Equity
|
$
|
3,358,173
|
$
|
72,822,931
|
$
|
83,386,887
|
•
|
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 (22,521,272 of the shares of our common stock that are
being
registered herein were acquired by selling stockholders in connection
with
acquisitions by us);
|
|
•
|
|
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
|
Total
Shares Beneficially Owned Before Offering
|
Percentage
of Outstanding Shares Beneficially Owned Before Offering
(1)
|
Contingent
Shares Not Considered Beneficially Owned
|
Shares
to be Sold in the Offering
|
Percentage
of Outstanding Shares Beneficially Owned After Offering
(1)
|
|||||||||||||||||
The
Bethell Family Trust
|
10,000,000
|
1.78
|
%
|
-
|
10,000,000
|
(2
|
)
|
0.00
|
%
|
|||||||||||||
Paul
Sadler
|
2,200,000
|
0.39
|
%
|
-
|
2,200,000
|
(3
|
)
|
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
|
0.10
|
%
|
-
|
587,471
|
0.00
|
%
|
|||||||||||||||
Jared
B. Reimer
|
153,156
|
0.03
|
%
|
-
|
153,156
|
0.00
|
%
|
|||||||||||||||
Dr.
Ronald Reimer
|
72,456
|
0.01
|
%
|
-
|
72,456
|
0.00
|
%
|
|||||||||||||||
Pankaj
Sharma
|
72,456
|
0.01
|
%
|
-
|
72,456
|
0.00
|
%
|
|||||||||||||||
Kim
DeWitt
|
42,215
|
0.01
|
%
|
-
|
42,215
|
0.00
|
%
|
|||||||||||||||
Robert
Doggett
|
351,133
|
0.06
|
%
|
-
|
351,133
|
0.00
|
%
|
|||||||||||||||
Dr.
Bhagwab Swaroop Misra
|
7,319
|
0.00
|
%
|
-
|
7,319
|
0.00
|
%
|
|||||||||||||||
Subtotal
|
1,307,870
|
0.23
|
%
|
-
|
1,307,870
|
(4
|
)
|
0.00
|
%
|
|||||||||||||
Cornell
Capital Partners, L.P.
|
29,225,856
|
4.99
|
%
|
31,170,740
|
56,000,000
|
(5
|
)
|
0.71
|
%
|
|||||||||||||
-
|
||||||||||||||||||||||
Airlie
Master Opportunity Fund, Ltd.
|
1,866,666
|
0.33
|
%
|
-
|
1,866,666
|
0.00
|
%
|
|||||||||||||||
Richard
Berritt
|
1,866,667
|
0.33
|
%
|
-
|
1,866,667
|
0.00
|
%
|
|||||||||||||||
Jonathan
Heine
|
1,866,667
|
0.33
|
%
|
-
|
1,866,667
|
0.00
|
%
|
|||||||||||||||
Subtotal
|
5,600,000
|
0.99
|
%
|
-
|
5,600,000
|
(6
|
)
|
0.00
|
%
|
|||||||||||||
ABLECO
Finance, LLC
|
456,250
|
0.08
|
%
|
-
|
456,250
|
(7
|
)
|
0.00
|
%
|
|||||||||||||
ARK-CLO
2000-1
|
447,303
|
0.08
|
%
|
-
|
447,303
|
(8
|
)
|
0.00
|
%
|
|||||||||||||
Avenue
Special Situations Fund II, LP
|
118,386
|
0.02
|
%
|
-
|
118,386
|
(9
|
)
|
0.00
|
%
|
|||||||||||||
BNP
Paribas
|
208,727
|
0.04
|
%
|
-
|
208,727
|
(10
|
)
|
0.00
|
%
|
|||||||||||||
Cerberus
Partners, L.P.
|
1,884,475
|
0.33
|
%
|
-
|
1,884,475
|
(11
|
)
|
0.00
|
%
|
|||||||||||||
Foothill
Partners III, L.P.
|
684,375
|
0.12
|
%
|
-
|
684,375
|
(12
|
)
|
0.00
|
%
|
|||||||||||||
Morgan
Stanley Prime Income Trust
|
98,655
|
0.02
|
%
|
-
|
98,655
|
(13
|
)
|
0.00
|
%
|
|||||||||||||
PNC
Bank N.A.
|
208,727
|
0.04
|
%
|
-
|
208,727
|
(14
|
)
|
0.00
|
%
|
|||||||||||||
US
Bank, N.A.
|
208,727
|
0.04
|
%
|
-
|
208,727
|
(15
|
)
|
0.00
|
%
|
|||||||||||||
Wells
Fargo Foothill, Inc.
|
684,375
|
0.12
|
%
|
-
|
684,375
|
(16
|
)
|
0.00
|
%
|
|||||||||||||
Subtotal
|
5,000,000
|
0.88
|
%
|
-
|
5,000,000
|
(17
|
)
|
0.00
|
%
|
|||||||||||||
Peter
Aquino
|
3,728
|
0.00
|
%
|
-
|
300
|
0.00
|
%
|
|||||||||||||||
Alexander
Enterprise Holdings
|
1,260,939
|
0.22
|
%
|
-
|
101,455
|
0.21
|
%
|
|||||||||||||||
Daniel
P. Behuniak
|
205,809
|
0.04
|
%
|
-
|
20,291
|
0.03
|
%
|
|||||||||||||||
Yakob
Ben-Shlomo
|
60,525
|
0.01
|
%
|
-
|
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
|
0.01
|
%
|
-
|
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
Cortez
|
51,446
|
0.01
|
%
|
-
|
4,139
|
0.01
|
%
|
William
P. Dioguardi
|
183,342
|
0.03
|
%
|
-
|
55,800
|
0.02
|
%
|
|||||||||||||||
Drax
Holdings LP
|
1,260,939
|
0.22
|
%
|
-
|
101,455
|
0.21
|
%
|
|||||||||||||||
Chris
Drazdys
|
114,199
|
0.02
|
%
|
-
|
9,188
|
0.02
|
%
|
|||||||||||||||
Val
Drazdys
|
41,162
|
0.01
|
%
|
-
|
3,312
|
0.01
|
%
|
|||||||||||||||
Natasha
Ervin
|
2,848
|
0.00
|
%
|
-
|
229
|
0.00
|
%
|
|||||||||||||||
Donald
F. Farley
|
75,656
|
0.01
|
%
|
-
|
6,087
|
0.01
|
%
|
|||||||||||||||
Mohinder
Goswami
|
252,188
|
0.04
|
%
|
-
|
20,291
|
0.04
|
%
|
|||||||||||||||
Mary
Guerra
|
121,050
|
0.02
|
%
|
-
|
9,740
|
0.02
|
%
|
|||||||||||||||
Peter
Habib
|
52,959
|
0.01
|
%
|
-
|
4,261
|
0.01
|
%
|
|||||||||||||||
Raja
B. Hannush
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.00
|
%
|
|||||||||||||||
Health
Care Professionals, Inc.
|
1,513,124
|
0.27
|
%
|
121,746
|
0.25
|
%
|
||||||||||||||||
David
Hoachman
|
113,484
|
0.02
|
%
|
-
|
9,131
|
0.02
|
%
|
|||||||||||||||
Jimayne
Howser
|
7,439
|
0.00
|
%
|
-
|
599
|
0.00
|
%
|
|||||||||||||||
Lawrence
R. Hyman
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.00
|
%
|
|||||||||||||||
Lawrence
R. and Lois Hyman as TBE
|
302,625
|
0.05
|
%
|
-
|
24,349
|
0.05
|
%
|
|||||||||||||||
Ammar
Kawash
|
151,260
|
0.03
|
%
|
-
|
12,170
|
0.02
|
%
|
|||||||||||||||
Timothy
Keating
|
8,899
|
0.00
|
%
|
-
|
8,899
|
0.00
|
%
|
|||||||||||||||
Allen
H. Kupetz
|
25,218
|
0.00
|
%
|
-
|
2,029
|
0.00
|
%
|
|||||||||||||||
Frank
Frost Lane
|
68,091
|
0.01
|
%
|
-
|
5,479
|
0.01
|
%
|
|||||||||||||||
JoAnn
Lanning
|
7,418
|
0.00
|
%
|
-
|
597
|
0.00
|
%
|
|||||||||||||||
Paul
Latchford
|
222,914
|
0.04
|
%
|
-
|
17,936
|
0.04
|
%
|
|||||||||||||||
Jerry
and Michelle Levine as TBE
|
151,313
|
0.03
|
%
|
-
|
12,175
|
0.02
|
%
|
|||||||||||||||
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
|
0.46
|
%
|
-
|
205,910
|
0.42
|
%
|
|||||||||||||||
Thomas
Mazerski
|
2,047,344
|
0.37
|
%
|
-
|
164,729
|
(18
|
)
|
0.34
|
%
|
|||||||||||||
Robert
William McCausland
|
504,376
|
0.09
|
%
|
-
|
40,582
|
0.08
|
%
|
|||||||||||||||
Hugh
McConnell
|
96,686
|
0.02
|
%
|
-
|
7,779
|
0.02
|
%
|
|||||||||||||||
Paul
B. McHugh
|
38,583
|
0.01
|
%
|
-
|
3,104
|
0.01
|
%
|
|||||||||||||||
Randy
Moore
|
130,708
|
0.02
|
%
|
-
|
8,505
|
0.02
|
%
|
|||||||||||||||
Mark
Norris
|
151,313
|
0.03
|
%
|
-
|
12,175
|
(34
|
)
|
0.02
|
%
|
|||||||||||||
Richard
O’Connell
|
1,270,260
|
0.23
|
%
|
-
|
102,205
|
0.21
|
%
|
|||||||||||||||
Jennifer
Orem
|
932
|
0.00
|
%
|
-
|
75
|
0.00
|
%
|
|||||||||||||||
John
C. Payne
|
933,093
|
0.17
|
%
|
-
|
75,076
|
0.15
|
%
|
|||||||||||||||
Jamie
Pollock
|
3,464
|
0.00
|
%
|
-
|
279
|
0.00
|
%
|
|||||||||||||||
Richard
Ramlall
|
324,560
|
0.06
|
%
|
-
|
26,114
|
0.05
|
%
|
|||||||||||||||
Cynthia
A. Ryan
|
189,140
|
0.03
|
%
|
-
|
15,218
|
0.03
|
%
|
|||||||||||||||
Frederick
Sass
|
25,218
|
0.00
|
%
|
-
|
2,029
|
0.00
|
%
|
|||||||||||||||
Joseph
P. Schmelzeis
|
31,523
|
0.01
|
%
|
-
|
2,536
|
0.01
|
%
|
|||||||||||||||
Fredrik
C. Schreuder
|
252,186
|
0.04
|
%
|
-
|
20,291
|
0.04
|
%
|
|||||||||||||||
Stephen
Schwartz
|
63,048
|
0.01
|
%
|
-
|
5,073
|
0.01
|
%
|
|||||||||||||||
Shah,
Vipul
|
63,046
|
0.01
|
%
|
-
|
5,073
|
0.01
|
%
|
|||||||||||||||
Spencer
Segura
|
453,937
|
0.08
|
%
|
-
|
36,524
|
0.07
|
%
|
|||||||||||||||
Spencer
Trask Illumination Fund
|
635,512
|
0.11
|
%
|
-
|
51,133
|
(37
|
)
|
0.10
|
%
|
Spencer
Trask Media & Communication Group, LLC
|
7,565,618
|
1.35
|
%
|
-
|
608,728
|
(37
|
)
|
1.24
|
%
|
|||||||||||||
Melissa
Stoneberg
|
3,700
|
0.00
|
%
|
-
|
298
|
0.00
|
%
|
|||||||||||||||
Stacey
Swoboda
|
3,728
|
0.00
|
%
|
-
|
300
|
0.00
|
%
|
|||||||||||||||
Paul
Taylor
|
136,093
|
0.02
|
%
|
-
|
10,145
|
0.02
|
%
|
|||||||||||||||
Luca
Toscani
|
36,214
|
0.01
|
%
|
-
|
2,914
|
0.01
|
%
|
|||||||||||||||
Michele
Toscani
|
12,862
|
0.00
|
%
|
-
|
1,035
|
0.00
|
%
|
|||||||||||||||
Greg
Van Allen
|
36,482
|
0.01
|
%
|
-
|
1,125
|
0.01
|
%
|
|||||||||||||||
John
Vandewalle
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.00
|
%
|
|||||||||||||||
Viventures
2 Entrepeneurs Fund LP
|
43,502
|
0.01
|
%
|
-
|
3,500
|
(38
|
)
|
0.01
|
%
|
|||||||||||||
Viventures
2 FCPR
|
15,284,489
|
2.72
|
%
|
-
|
1,229,782
|
(38
|
)
|
2.50
|
%
|
|||||||||||||
Nancy
Walcutt
|
3,939
|
0.00
|
%
|
-
|
317
|
0.00
|
%
|
|||||||||||||||
Subtotal
|
39,464,325
|
7.00
|
%
|
-
|
3,223,625
|
(19
|
)
|
6.43
|
%
|
|||||||||||||
Martin
Levetin
|
325,000
|
0.06
|
%
|
275,000
|
(36
|
)
|
600,000
|
(20
|
)
|
0.00
|
%
|
|||||||||||
Geoffrey
B. Amend
|
2,681,159
|
0.48
|
%
|
1,318,841
|
3,500,000
|
(21
|
)
|
0.01
|
%
|
|||||||||||||
Larry
Bouts
|
800,000
|
0.14
|
%
|
250,000
|
800,000
|
(22
|
)
|
0.00
|
%
|
|||||||||||||
Dr.
Bruce Bowman
|
260,000
|
0.05
|
%
|
250,000
|
250,000
|
(22
|
)
|
0.00
|
%
|
|||||||||||||
Hank
Deily
|
291,667
|
0.05
|
%
|
958,333
|
750,000
|
(23
|
)
|
0.01
|
%
|
|||||||||||||
John
Dumbleton
|
831,615
|
0.15
|
%
|
-
|
831,615
|
(24
|
)
|
0.00
|
%
|
|||||||||||||
Kurt
Gordon
|
7,875,000
|
1.39
|
%
|
125,000
|
1,500,000
|
(25
|
)
|
1.14
|
%
|
|||||||||||||
Don
Gunther
|
839,500
|
0.15
|
%
|
250,000
|
800,000
|
(22
|
)
|
0.01
|
%
|
|||||||||||||
Hawk
Associates, Inc.
|
200,000
|
0.04
|
%
|
-
|
200,000
|
(26
|
)
|
0.00
|
%
|
|||||||||||||
John
von Harz
|
933,333
|
0.17
|
%
|
266,667
|
800,000
|
(27
|
)
|
0.02
|
%
|
|||||||||||||
Kevin
Kuykendall
|
3,538,950
|
0.63
|
%
|
-
|
3,500,000
|
(28
|
)
|
0.01
|
%
|
|||||||||||||
Michael
Kleeman
|
250,000
|
0.04
|
%
|
-
|
250,000
|
(22
|
)
|
0.00
|
%
|
|||||||||||||
Chris
MacFarland
|
1,140,910
|
0.20
|
%
|
159,090
|
1,050,000
|
(29
|
)
|
0.02
|
%
|
|||||||||||||
Tammy
Martin
|
1,541,667
|
0.27
|
%
|
458,333
|
1,500,000
|
(30
|
)
|
0.01
|
%
|
|||||||||||||
Tom
Mazerski
|
1,531,250
|
0.27
|
%
|
468,750
|
1,500,000
|
(35
|
)
|
0.08
|
%
|
|||||||||||||
Michael
O’Neil
|
1,242,410
|
0.22
|
%
|
159,090
|
1,050,000
|
(39
|
)
|
0.03
|
%
|
|||||||||||||
Ocean
Avenue Advisors
|
2,000,000
|
0.36
|
%
|
-
|
2,000,000
|
(31
|
)
|
0.00
|
%
|
|||||||||||||
Philip
Otto
|
250,000
|
0.04
|
%
|
250,000
|
250,000
|
(22
|
)
|
0.00
|
%
|
|||||||||||||
Bruce
Sanguinetti
|
4,000,000
|
0.71
|
%
|
-
|
3,000,000
|
(32
|
)
|
0.18
|
%
|
|||||||||||||
Paul
Silverman
|
1,000,000
|
0.18
|
%
|
250,000
|
1,000,000
|
(22
|
)
|
0.00
|
%
|
|||||||||||||
Don
Sledge
|
840,910
|
0.15
|
%
|
159,090
|
750,000
|
(40
|
)
|
0.02
|
%
|
|||||||||||||
Fred
Tarter
|
1,000,000
|
0.18
|
%
|
-
|
1,000,000
|
(22
|
)
|
0.00
|
%
|
|||||||||||||
Jay
O. Wright
|
17,388,196
|
3.01
|
%
|
3,030,304
|
5,000,000
|
(33
|
)
|
2.65
|
%
|
|||||||||||||
50,436,567
|
8.27
|
%
|
8,353,498
|
(36
|
)
|
31,281,615
|
3.92
|
%
|
||||||||||||||
Grand
Totals
|
143,559,618
|
22.13
|
%
|
39,799,238
|
115,213,110
|
9.45
|
%
|
(1) |
The
percentage of outstanding shares is based on 560,666,950
shares of common
stock outstanding on March 31, 2006, together with shares
deemed
beneficially
owned by each such stockholder. 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 that may be obtained within 60 days
of March 31,
2006
are deemed to be beneficially owned by the person holding
such securities
that are convertible or exchangeable into shares of common
stock 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) |
The
Bethell Family Trust received a total of 10,000,000 shares
of our common
stock, 6,000,000 shares on July 13, 2005 and 4,000,000 shares
on August
24, 2005, in
connection with our acquisition of American Fiber Network,
Inc. Doug
Bethell, the former CEO of AFN continues as President of
AFN subsequent to
our acquisition.
Mr. Bethell maintains investment and voting control of the
Bethell Family
Trust.
|
(3) |
Paul
Sadler, the former owner of Clover Computer Corporation,
holds 2,200,000
shares of our common stock that were acquired upon his conversion
of a
convertible note, in
the amount of $271,131.85, plus accrued interest, in the
amount of
$10,221.30, and the settlement of a second note, in the amount
of
$253,834.11, on June 23, 2005. Both
notes were issued in connection with our acquisition of Clover.
The
convertible note had a maturity date of July 6, 2006, bore
interest at an
annual rate of 4.00%, and
was convertible into shares of our common stock at any time
during the
term at a price of $0.20 per share. The second note was due
on July 6,
2006, bore interest at
the annual rate of 7.00%, and was converted into shares of
our common
stock at a conversion price of $0.32 per
share.
|
(4) |
These
former owners of The River Internet Access Co., acquired
by us in
September 2004, hold 1,307,870 shares of our common stock
that were issued
on October 6, 2005 upon
the conversion of debentures received by them in connection
with the
acquisition. The debentures had a maturity date of September
16, 2006,
bore interest at
the annual rate of 3.00%, and were convertible into shares
of our common
stock at any time during their terms at $0.20 per share.
The debenture
principal amounts
were subject to downward adjustments pending the results
of an acquisition
audit or the occurrence of any damages as defined in the
merger
agreement.
|
(5) |
Cornell
Capital holds a $15.0 million debenture convertible into
50,000,000 shares
of our common stock at a per share price of $0.30 and
a warrant to purchase 6,000,000 shares of our common stock
at a per share
price of $0.50, both dated May 13, 2005, and provides equity
financing to us through the $100 million Standby Equity Distribution
Agreement. Mark
Angelo maintains investment and voting control of these shares.
For
presentation purposes above, the shares of our common stock
issuable upon
the conversion of the debenture that would result in ownership
greater
than 4.99% are
not considered beneficially owned by Cornell Capital at December
31, 2005.
Pursuant to the terms of the debenture, conversion of the
debenture for a
number of shares in
excess of that number of shares which, upon giving effect
to such
conversion, would cause the aggregate number of shares beneficially
owned
by Cornell Capital to exceed
4.99% of our outstanding shares following such conversion
requires at
least 65 days prior notice. No such notice has been received
by us. Upon
the receipt of such
notice, conversion could occur pursuant to the terms of the
debenture with
Cornell Capital becoming the beneficial owner of the shares.
See Notes 2,
8 and 9 to the Condensed
Consolidated Financial Statements as of December 31, 2005
for additional
information about the convertible debenture, the stock warrant
and the
Standby Equity
Distribution Agreement.
|
(6) |
Represents
warrants to purchase shares of our common stock that were
issued on
November 15, 2004 to Airlie Master Opportunity Fund, Ltd.,
the source of
the Davel bridge
financing, and the brokers involved with the arrangement
of this loan.
Dort and Seth Cameron maintain investment and voting control
of the Airlie
Fund. These
warrants are exercisable at a per share price of $0.20, and
they expire on
November 14, 2011.
|
(7) |
Steven
Feinberg maintains investment and voting control of Ableco
Finance,
LLC.
|
(8) |
Lynn
Tilton maintains investment and voting control of ARK-CLO
2000-1,
Limited.
|
(9) |
Matthew
Kimble maintains investment and voting control of Avenue
Special
Situations Fund, II,
LP.
|
(10) |
Everett
Schenk maintains investment and voting control of BNP
Paribus.
|
(11) |
Steven
Feinberg maintains investment and voting control of Cerberus
Partners,
L.P.
|
(12) |
Dennis
Archer maintains investment and voting control of Foothill
Partners
III.
|
(13) |
Sheila
Finnerty maintains investment and voting control of Morgan
Stanley Prime
Income Trust.
|
(14) |
Frank
Devine maintains investment and voting control of PNC Bank
N.A.
|
(15) |
James
P. Cecil maintains investment and voting control of U.S.
Bank,
N.A.
|
(16)
|
Scott
Diehl maintains investment and voting control of Wells Fargo
Foothill,
Inc.
|
(17) |
Represents
warrants to purchase shares of our common stock that were
issued on
November 15, 2004 to certain lenders in connection with our
acquisition of
100% of the senior
secured debt of Davel and an assignment by those lenders
of their shares
of Davel's common stock representing approximately 95% of
Davel's issued
and outstanding
common stock. These warrants are exercisable at a per share
price of $0.30
and expire on November 14,
2009.
|
(18) |
Represents
warrants to purchase shares of our common stock, 117,663
shares at $0.30
per share and 47,065 shares at $0.35 per share, that expire
on October 15,
2009. Mr.
Mazerski, a founder and the President and CEO of CloseCall
prior to our
acquisition, currently serves as Chief Executive Officer
of Close Call.
|
(19) |
Represents
warrants to purchase shares of our common stock that were
issued on
October 15, 2004 to the former owners of CloseCall America
in connection
with its
acquisition by us and that expire on October 15, 2009. Warrants
to
purchase approximately 2,302,590 shares are exercisable at
$0.30 per
share, and warrants to purchase approximately 921,035 shares
are
exercisable at $0.35 per
share.
|
(20) |
Martin
Levetin, a former owner of Evergreen Open Broadband Corporation,
received
a warrant to purchase 600,000 shares of our common stock
on April 21, 2005
in connection
with
our acquisition of Evergreen. Currently, Mr. Levetin serves
as a Vice
President in our NeoReach Wireless organization in the area
of business
development. Mr. Levetin's warrant is exercisable at a per
share price of
$0.16, and expires on April 21,
2010.
|
(21) |
Represents
warrants to purchase 2,000,000 shares of our common stock
and warrants to
purchase 1,500,000 shares of our common stock that were awarded
to
Geoffrey
Amend, who currently serves as our Senior Vice President,
General Counsel
and Secretary, on November 1, 2004 and April 20, 2005, respectively.
50%
of the warrant for
2,000,000 shares vests ratably over 24 months from the award
date, and
1,000,0000 shares vested upon our achieving $5 million in
EBITDA over a
consecutive 12 month period.
The warrant for 1,500,000 shares vests over a 23 month period
from the
award date. The warrants are exercisable at per share prices
of $0.20 and
$.155, respectively, and
expire on November 1, 2014 and April 20, 2015,
respectively.
|
(22) |
Represents
warrants to purchase common stock issued to each member of
our board of
advisors as follows - Messrs. Silverman and Tarter were each
issued a
10-year warrant to purchase
1,000,000 shares of our common stock on January 1, 2004 and
July 20, 2004,
respectively. Both of these warrants are exercisable at $0.20
per share
and they were fully
vested at March 31, 2006. Messrs. Bouts and Gunther were
each issued a
10-year warrant to purchase 800,000 shares of our common
stock on January
1, 2004 and June
28, 2004, respectively. Both of these warrants are exercisable
at $0.20
per share and they were fully vested at March 31, 2006. Mr.
Otto and Dr.
Bowman were each issued a
10-year warrant to purchase 250,000 shares of our common
stock, dated
February 17, 2005, that vests ratably over 12 months from
the date of
award. These warrants are exercisable
at a per share price of $0.155 and $0.193, respectively.
Mr. Kleeman was
issued a 10-year warrant to purchase 250,000 shares of our
common stock on
May 17, 2005 that
vests ratably over 12 months from the date of award. This
warrant is
exercisable at a price of $0.33 per share.
|
(23) |
Represents
a warrant to purchase 750,000 shares of our common stock awarded
on June
20, 2005 to Hank Deily, who currently serves as our Senior
Vice President,
Chief Accounting
Officer. This warrant vests in three equal installments on
March 31, 2006,
2007 and 2008, it is exercisable at a per share price of $0.31,
and
it expires on June 20, 2015.
|
(24) |
Mr.
Dumbleton was our Executive Vice President, Sales and Business
Development, until his employment with us ended on January
15, 2006.
|
(25) |
Represents
a warrant to purchase 1,500,000 shares of our common stock
awarded on
April 1, 2005 to Kurt Gordon, who served as our Chief Financial
Officer
until March 31, 2006. This
warrant vested over 12 months from the date of award, is
exercisable at a
per share price of $0.22 per share, and expires on April
1,
2015.
|
(26) |
Represents
a warrant to purchase 200,000 shares of our common stock
issued on
February 1, 2003 to Hawk Associates, Inc., a firm that currently
provides
investor and
public relations services to us. This warrant was fully vested
at December
31, 2005, is exercisable at a per share price of $0.15, and
expires on
February 1, 2010.
|
(27) |
Represents
a warrant to purchase 800,000 shares of our common stock
awarded on
January 1, 2004 to John von Harz, a former member of our
board of
advisors, who currently
serves as a Vice President of our NeoReach Wireless organization
in the
area of business development. This warrant was fully vested
on December
31, 2005, is exercisable at a per share price of $0.02, and
expires on
January 1, 2014.
|
(28) |
Represents
warrants to purchase 3,500,000 shares of our common stock
awarded on June
10, 2004 to Kevin Kuykendall who served as President of our
voice business
segment from
June 2004 through December 2004. These warrants were fully
vested on
December 31, 2005, are exercisable at a per share price of
$0.20, and
expire on June 10, 2014.
|
(29) |
Represents
a warrant to purchase 800,000 shares of our common stock
awarded on March
1, 2004 to Chris MacFarland, a member of our Board of Directors,
that will
be fully vested
on February 18, 2006, and a warrant to purchase 250,000 shares
of our
common stock, awarded on June 16, 2005, that vests ratably
until April 20,
2006. These
warrants are exercisable at per share prices of $0.10 and
$0.15,
respectively, and they expire on March 1, 2014 and April
20, 2015,
respectively.
|
(30) |
Represents
a warrant to purchase 1,500,000 shares of our common stock
awarded on
April 20, 2005 to Tammy Martin, formerly the General Counsel
of Davel, who
currently serves
as its Chief Executive Officer, and who also serves as our
Senior Vice
President, Chief Administrative Officer and Treasurer. This
warrant was
fully vested at
March 31, 2006, is exercisable at a per share price of $0.155,
and expires
on April 20, 2015.
|
(31) |
Represents
shares issuable upon the exercise of a warrant to purchase
our common
stock that was granted in July 2004 in connection with the
provision of
investor relations
services. This warrant was fully vested at December 31, 2005,
is
exercisable at a per share price of $0.18, and expires on
July 1,
2014.
|
(32) |
Represents
a warrant to purchase 3,000,000 shares of our common stock
awarded on
January 1, 2005 to Bruce Sanguinetti, the former President
and Chief
Executive of NeoReach that
were fully vested on December 31, 2005, is exercisable at
a per share
price of $0.16, and expires on January 1,
2015.
|
(33) |
Represents
a warrant to purchase 5,000,000 shares of our common stock
awarded on
April 1, 2005 to Jay O. Wright who currently serves as our
Chief Executive
Officer; Mr.
Wright also serves as Chairman of our Board of Directors.
This warrant
vests ratably over 33 months from April 1, 2005, is exercisable
at a per
share price of $0.22, and expires
on April 1, 2015.
|
(34) |
Represents
warrants to purchase shares of our common stock, 8,696 shares
at $0.30 per
share and 3,478 shares at $0.35 per share, that expire on
October 15,
2009. Mr.
Norris currently serves as Chief Financial Officer of our
voice business
segment on a temporary basis. This warrant was fully vested
on December
31, 2005.
|
(35) |
Represents
a warrant to purchase 1,500,000 shares of our common stock
that was
awarded to Mr. Mazerski on April 20, 2005. The
warrant vests over an 18-month period in equal monthly installments
from
April 20, 2005, is exercisable at a per share price of $0.155
and expires
on April 20, 2015.
|
(36) |
Represents
shares of our common stock that will become exercisable pursuant
to the
terms of outstanding stock warrant and stock option agreements
beyond 60
days from
March 31, 2006. Consequently, these shares are not considered
beneficially
owned by the holder of the stock warrant or option on March
31,
2006.
|
(37) |
William
Dioguardi, President of Spencer Trask Ventures, Inc. maintains
investment
and voting control of these
shares.
|
(38) |
Gabriel
Montessus maintains investment and voting control of these
shares.
|
(39) |
Includes
a warrant to purchase 800,000 shares of our common stock
awarded on
January 1, 2004 to Michael O'Neil, a member of our Board
of Directors,
that was fully
vested on December 31, 2005, and a warrant to purchase 250,000
shares of
our common stock, awarded on June 16, 2005, that vests ratably
until April
20, 2006. These
warrants are exercisable at per share prices of $0.02 and
$0.15,
respectively, and expire on January 1, 2014 and April 20,
2015,
respectively.
|
(40) |
Includes
a warrant to purchase 500,000 shares of our common stock awarded
on
January 19, 2005 to Don Sledge, a member of our Board of Directors,
that
was fully vested
on December 31, 2005, and a warrant to purchase 250,000 shares
of our
common stock, awarded on June 16, 2005, that vests ratably
until April 20,
2006. These
warrants are exercisable at per share prices of $0.185 and
$0.15,
respectively, and expire on January 19, 2015 and April 20,
2015,
respectively.
|
Wireless
Networks
|
Our
broadband wireless network deployment efforts are being conducted
by our
wholly-owned subsidiary, NeoReach, Inc., and its subsidiary,
NeoReach
Wireless, Inc. This segment also includes the operations of
Kite
Broadband, LLC, a wireless broadband Internet service provider
located in
Ridgeland, Mississippi.
|
Voice Services
|
Our
voice services segment is led by CloseCall America, Inc., a
CLEC based in
Stevensville, Maryland; American Fiber Network, Inc., a CLEC
based in
Kansas City, Kansas; and Davel Communications, Inc., 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/or
Internet services throughout the United States. Davel is one
of the
largest independent payphone operators in the United States,
providing
approximately 57% of the revenues of the voice services segment
in the
nine months ended December 31, 2005.
|
Internet Services
|
Our
internet services segment includes the operations of DFW Internet
Services, Inc., an ISP based in Irving, Texas, its acquired
ISP
subsidiaries, and InReach Internet, L.L.C., a full service
ISP located in
Stockton, California that we acquired on November 1, 2005.
Our Internet
services segment provides dial-up and broadband Internet access,
web-hosting services and related Internet services to business
and
residential customers in over 40 states. Over 80% of our ISP
customers
subscribe to our dial-up service.
|
Corporate
|
Our
corporate reporting segment serves as the holding company of
the operating
subsidiaries that are divided among the other three business
reporting
segments, provides senior executive and financial management,
and performs
corporate-level accounting, financial reporting and legal functions.
Occasionally, its employees may provide services to customers
resulting in
the recognition of consulting service
revenues.
|
Three
Months Ended
December 31, |
Nine
Months Ended
December 31, |
||||||||||||
Business
Segment
|
2004
|
2005
|
2004
|
2005
|
|||||||||
Voice
Services
|
$
|
12,391,227
|
$
|
18,505,132
|
$
|
13,346,798
|
$
|
56,301,164
|
|||||
Internet
Services
|
4,735,906
|
4,534,617
|
9,303,568
|
12,395,635
|
|||||||||
Wireless
Networks
|
-
|
3,204,857
|
-
|
6,600,302
|
|||||||||
Corporate
|
-
|
-
|
615,000
|
-
|
|||||||||
Total
Revenues
|
$
|
17,127,133
|
$
|
26,244,606
|
$
|
23,265,366
|
$
|
75,297,101
|
Three
Months Ended
December 31, |
Nine
Months Ended
December 31, |
||||||||||||
Business
Segment
|
2004
|
2005
|
2004
|
2005
|
|||||||||
Voice
Services
|
72.3
|
%
|
70.5
|
%
|
57.4
|
%
|
74.8
|
%
|
|||||
Internet
Services
|
27.7
|
17.3
|
40.0
|
16.5
|
|||||||||
Wireless
Networks
|
-
|
12.2
|
-
|
8.7
|
|||||||||
Corporate
|
-
|
2.6
|
|||||||||||
Total
Revenues
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
- |
create
a standard regulatory scheme for all public payphone service
providers;
|
- |
establish
a per call compensation plan to ensure that all payphone service
providers
are fairly compensated for each and every completed intrastate
and
interstate call, except for 911 emergency and telecommunications
relay
service calls;
|
- |
terminate
subsidies for LEC payphones from LEC regulated rate-base
operations;
|
- |
prescribe,
at a minimum, nonstructural safeguards to eliminate discrimination
between
LECs and IPPs and remove the LEC payphones from the LEC’s regulated asset
base;
|
- |
provide
for the RBOCs to have the same rights that IPPs have to negotiate
with
Location Owners over the selection of interLATA carrier services,
subject
to the FCC’s determination that the selection right is in the public
interest and subject to existing contracts between the Location Owners
and
interLATA carriers;
|
- |
provide
for the right of all PSPs to choose the local, intraLATA and interLATA
carriers subject to the requirements of, and contractual rights negotiated
with, Location Owners and other valid state regulatory
requirements;
|
- |
evaluate
the requirement for payphones which would not normally be installed
under
competitive conditions but which might be desirable as a matter of
public
policy, and establish how to provide for and maintain such payphones
if it
is determined they are required;
and
|
- |
preempt
any state requirements which are inconsistent with the FCC’s regulations
implementing Section 276.
|
Finance,
accounting legal and administration
|
48
employees
|
|
Retail
operations (inlcudes CloseCall America, Inc. and
the call centers) |
155 employees
|
|
Wireless
networks (includes
Kite Broadband, LLC and NeoReach Wireless, Inc.) |
98
employees
|
|
Business
operations (includes
Davel Communications, Inc and American Fiber Network, Inc.) |
39
employees
|
Three
Months Ended
December 31, |
Nine
Months Ended
December 31, |
||||||||||||
Business
Segment
|
2004
|
2005
|
2004
|
2005
|
|||||||||
Voice
Services
|
$
|
12,391,227
|
$
|
18,505,132
|
$
|
13,346,798
|
$
|
56,301,164
|
|||||
Internet
Services
|
4,735,906
|
4,534,617
|
9,303,568
|
12,395,635
|
|||||||||
Wireless
Networks
|
-
|
3,204,857
|
-
|
6,600,302
|
|||||||||
Corporate
|
-
|
-
|
615,000
|
-
|
|||||||||
Total
Revenues
|
$
|
17,127,133
|
$
|
26,244,606
|
$
|
23,265,366
|
$
|
75,297,101
|
Three
Months Ended
December 31, |
Nine
Months Ended
December 31, |
||||||||||||
Business
Segment
|
2004
|
2005
|
2004
|
2005
|
|||||||||
Voice
Services
|
72.3
|
%
|
70.5
|
%
|
57.4
|
%
|
74.8
|
%
|
|||||
Internet
Services
|
27.7
|
17.3
|
40.0
|
16.5
|
|||||||||
Wireless
Networks
|
-
|
12.2
|
-
|
8.7
|
|||||||||
Corporate
|
-
|
2.6
|
|||||||||||
Total
Revenues
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
Acquired
Company
|
2004
|
2005
|
Increase
|
|||||||
Davel
|
$
|
6,377,744
|
$
|
10,084,268
|
$
|
3,706,524
|
||||
CloseCall
(includes Affinity and US1)
|
6,013,483
|
6,509,269
|
495,786
|
|||||||
Kite
|
-
|
3,199,366
|
3,199,366
|
|||||||
AFN
|
-
|
1,906,635
|
1,906,635
|
|||||||
InReach
|
-
|
943,138
|
943,138
|
|||||||
Total
Revenues
|
$
|
12,391,227
|
$
|
22,642,676
|
$
|
10,251,449
|
For
the Three Months Ended September 30,
|
For
the Three Months Ended
December 31, |
For
the Nine Months Ended December 31,
|
|||||||||||
2005
|
2005
|
2004
|
2005
|
||||||||||
Net
Income (Loss)
|
$
|
523,900
|
$
|
(6,955,732
|
)
|
$
|
(2,954,890
|
)
|
$
|
(6,012,640
|
)
|
||
Add
non-EBITDA items included in net results:
|
|||||||||||||
Depreciation
and amortization
|
1,047,319
|
1,293,993
|
792,717
|
3,163,689
|
|||||||||
Interest
expense, net
|
698,335
|
582,785
|
905,896
|
2,213,295
|
|||||||||
Goodwill
impairment and restructuring costs
|
-
|
5,100,041
|
-
|
5,100,041
|
|||||||||
Adjusted
EBITDA
|
$
|
2,269,554
|
$
|
21,087
|
$
|
(1,256,277
|
)
|
$
|
4,464,385
|
Acquired
Company
|
2004
|
2005
|
Increase
|
|||||||
Davel
|
$
|
6,377,744
|
$
|
32,283,029
|
$
|
25,905,285
|
||||
CloseCall
(includes Affinity and US1)
|
6,969,054
|
20,479,012
|
13,509,958
|
|||||||
Kite
|
-
|
6,584,680
|
6,584,680
|
|||||||
AFN
|
-
|
3,539,123
|
3,539,123
|
|||||||
InReach
|
-
|
943,138
|
943,138
|
|||||||
|
||||||||||
Total
Revenues
|
$
|
13,346,798
|
$
|
63,828,982
|
$
|
50,482,184
|
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
|
)
|
SEDA
Activity and Availability
|
Amounts
|
|||
Amounts
drawn under the SEDA to date (includes interest)
|
$
|
26,623,129
|
||
Total
number of shares of common stock registered for the SEDA
|
250,000,000
|
|||
Less
-- Number of shares of common stock issued to date under
the SEDA
|
(130,057,147
|
)
|
||
Total
number of shares of common stock available for future
draws
|
119,942,853
|
|||
Funds
available under the SEDA based on the number of shares of
common stock
available and a price per share of $0.174
|
$
|
20,870,056
|
Name
|
|
Age
|
|
Position
|
|
Jay
O. Wright
|
|
36
|
|
Chief
Executive Officer and Chairman of the Board
|
|
Jerry M. Sullivan, Jr. | 47 | President, Chief Operating Officer, and Director | |||
Geoffrey
B. Amend
|
|
37
|
|
Senior
Vice President, General Counsel and Secretary
|
|
Jack
W. Beech
|
|
35
|
|
Vice
President, Technology, and Director
|
|
Tom
Mazerski
|
|
53
|
|
Chief
Executive Officer, CloseCall America, Inc.
|
|
Tammy
L. Martin
|
|
41
|
|
Senior
Vice President, Chief Administration Officer and Treasurer
|
|
James L. Magruder, Jr. | 60 | Executive Vice President | |||
Doug Bethell | 56 | President, American Fiber Network, Inc. | |||
Richard H. Deily | 52 | Senior Vice President, Chief Accounting Officer | |||
Chris
MacFarland
|
|
33
|
|
Director
|
|
Michael
G. O’Neil
|
|
63
|
|
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
|
|||||||||||||||
|
|
Securities
|
||||||||||||||
|
Fiscal
|
Paid
|
Other
|
Underlying
|
||||||||||||
Name
and Principal Position
|
Year
|
Salary
|
Bonus
(2)
|
Payments
|
Options
|
|||||||||||
Jay
O. Wright
|
2006
|
$
|
217,500
|
$
|
739,062
|
$
|
–
|
5,000,000
|
||||||||
Chief
Executive Officer
|
2005
|
179,000
|
317,000
|
–
|
15,182,500
|
|||||||||||
2004
|
45,500
|
17,990
|
–
|
–
|
||||||||||||
|
||||||||||||||||
Jerry
M. Sullivan, Jr.
|
2006
|
$
|
155,769
|
$
|
–
|
$
|
–
|
10,000,000
|
||||||||
President
and Chief Operating Officer (1)
|
||||||||||||||||
Kurt
Gordon
|
2006
|
$
|
210,000
|
$
|
714,582
|
$
|
–
|
1,500,000
|
||||||||
Chief
Financial Officer
|
2005
|
174,000
|
297,150
|
–
|
–
|
|||||||||||
2004
|
13,000
|
10,000
|
–
|
6,500,000
|
||||||||||||
|
||||||||||||||||
Geoffrey
B. Amend
|
2006
|
$
|
176,250
|
$
|
–
|
$
|
–
|
2,000,000
|
||||||||
Senior
Vice President, General Counsel
|
2005
|
56,250
|
–
|
–
|
2,000,000
|
|||||||||||
|
||||||||||||||||
Tammy
L. Martin
|
2006
|
$
|
193,460
|
$
|
–
|
$
|
8,400
|
2,000,000
|
||||||||
Senior
Vice President, Chief Administrative Officer, and
|
2005
|
68,069
|
–
|
–
|
–
|
|||||||||||
Treasurer;
Chief Executive Officer, Davel Communications, Inc.
|
||||||||||||||||
Tom Mazerski |
2006
|
$ |
180,000
|
$
|
–
|
$
|
–
|
1,500,000
|
||||||||
Chief
Executive Officer
|
2005
|
83,077
|
–
|
–
|
500,000
|
|||||||||||
CloseCall America, Inc. |
(1) |
During
fiscal year 2006, Mr. Sullivan also earned an ownership interest
in Kite
Broadband, LLC ("Kite") that was exchanged for 8,667,450 shares
of our
common stock in connection with our acquisition of the minority
interest
of Kite in January 2006. Mr. Sullivan's salary amount covers
the period
from July 1, 2005, the date Kite began operations, to March
31,
2006.
|
(2) |
Amounts
represent bonus payments made during the indicated fiscal
year.
Payments made to both Mr. Wright and Mr. Gordon in fiscal
year 2006 in the
amount of $649,062 were earned and recorded in fiscal
2005.
|
Stock
Option/Warrant/SAR Grants Awarded in Fiscal Year
2006
|
Name
|
Number
of Securities Underlying
Awards
|
Percent
of Total Grants Awarded to Employees in
2006
|
Exercise
Price
per Share |
Expiration
Date
|
|||||||||
Jay
O. Wright
|
5,000,000
|
12.56
|
%
|
$
|
0.220
|
4/1/2015
|
|||||||
Jerry
M. Sullivan, Jr.
|
10,000,000
|
25.12
|
%
|
$
|
0.174
|
2/1/2016
|
|||||||
Kurt
Gordon
|
1,500,000
|
3.77
|
%
|
$
|
0.220
|
4/1/2015
|
|||||||
Geoffrey
B. Amend
|
1,500,000
|
3.77
|
%
|
$
|
0.155
|
4/20/2015
|
|||||||
500,000
|
1.26
|
%
|
$
|
0.233
|
4/1/2016
|
||||||||
Tammy
L. Martin
|
1,500,000
|
3.77
|
%
|
$
|
0.155
|
4/20/2015
|
|||||||
500,000
|
1.26
|
%
|
$
|
0.233
|
4/1/2016
|
||||||||
Tom
Mazerski
|
1,500,000
|
3.77
|
%
|
$
|
0.155
|
4/20/2015
|
|
Number
of Shares Acquired
|
Value
|
Number
of Securities Underlying Unexercised Options at
March 31, 2006 |
Value
of Unexercised
In-the-Money Options at March 31,2006 (2) |
|||||||||||||||
Name
|
Upon
Exercise
|
Realized
(1)
|
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
||||||||||||
Jay
O. Wright
|
-
|
$
|
-
|
16,549,166
|
3,633,334
|
$
|
3,036,030
|
$
|
61,200
|
||||||||||
Jerry
M. Sullivan, Jr.
|
-
|
-
|
2,697,368
|
7,302,632
|
129,474
|
350,526
|
|||||||||||||
Kurt
Gordon
|
-
|
-
|
7,875,000
|
125,000
|
1,326,000
|
-
|
|||||||||||||
Geoffrey
B. Amend
|
-
|
-
|
2,425,724
|
1,574,276
|
85,649
|
58,851
|
|||||||||||||
Tammy
L. Martin
|
-
|
-
|
1,500,000
|
500,000
|
100,500
|
-
|
|||||||||||||
Tom
Mazerski
|
-
|
-
|
1,258,478
|
906,250
|
61,417
|
39,083
|
(1)
The value realized upon the exercise of options is calculated using
the
closing sale price per share on the date of exercise less the exercise
price per share.
|
||||||||||||
(2)
The value of unexercised in-the-money options is calculated using
the
closing sale price per share on March 31, 2006 ($0.222) less the
applicable exercise price per share.
|
||||||||||||
|
Number
of Securities to Be
Issued
upon the 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
(1)
|
||||||||
|
(a)
|
(b)
|
(c)
|
|||||||
Equity
Compensation Plans Approved by the Stockholders
(2)
|
11,076,000
|
$
|
0.226
|
18,924,000
|
||||||
Equity
Compensation Plans Not Approved by the Stockholders
(3)
|
74,832,500
|
$
|
0.122
|
-
|
||||||
Totals
|
85,908,500
|
$
|
0.135
|
18,924,000
|
(1)
Excludes securities included in column (a).
|
|||||
|
|||||
(2)
Includes 30,000,000 shares of our common stock available for
issuance
under our 2001 Equity Performance Plan, all of which may
be issued as stock options, restricted stock or stock
bonuses.
|
|||||
(3)
Includes stock warrants awarded to directors, advisors, officers
and
consultants.
|
Shares
|
||||||||||
Title
of
|
Beneficially
|
Percent
of
|
||||||||
Name
|
Class
|
Owned
(1)
|
Class
(1)
|
|||||||
Southern
Farm Bureau Life Insurance Co.
|
Common
|
34,806,125
|
6.21
|
%
|
||||||
Cornell
Capital Partners, LP (2)
|
Common
|
29,225,856
|
4.99
|
%
|
||||||
Daniel
Lozinsky (3)
|
Common
|
23,143,122
|
4.09
|
%
|
||||||
Jay
O. Wright (4)
|
Common
|
17,388,196
|
3.01
|
%
|
||||||
Jerry
M. Sullivan, Jr. (5)
|
Common
|
12,896,592
|
2.29
|
%
|
||||||
Kurt
Gordon (6)
|
Common
|
7,875,000
|
1.39
|
%
|
||||||
Geoffrey
B. Amend (6)
|
Common
|
2,681,159
|
*
|
|||||||
Tom
Mazerski (7)
|
Common
|
3,329,369
|
*
|
|||||||
Tammy
L. Martin (6)
|
Common
|
1,541,667
|
*
|
|||||||
Michael
G. O'Neil (8)
|
Common
|
1,242,410
|
*
|
|||||||
Chris
MacFarland (6)
|
Common
|
1,140,910
|
*
|
|||||||
Donald
Sledge (6)
|
Common
|
840,910
|
*
|
|||||||
Officers
and Directors as a Group
|
75,607,024
|
12.52
|
%
|
|||||||
(15
persons) (9)
|
*
|
Less
than 1%.
|
(1)
|
Applicable
percentage of ownership is based on 560,666,950 shares of common
stock
outstanding as of March 31, 2006, 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 March 31, 2006 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
4,396,596 shares of common stock, 6,000,000 shares of common
stock
issuable upon the exercise of a warrant to purchase our common
stock; and a limited number of shares (18,829,260 shares) of our
common stock issuable upon the conversion of the $15.0 million
debenture.
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
236,000 shares of our common stock and 17,152,196 shares of common
stock
issuable upon the exercise of warrants to purchase our common
stock.
|
|
(5)
|
Includes
10,001,856 shares of our common stock and 2,894,736 shares of common
stock
issuable upon the exercise of warrants to purchase our common
stock.
|
(6)
|
Includes
shares of common stock issuable upon the exercise of warrants to
purchase
our common stock.
|
(7)
|
Includes
1,883,391 shares of our common stock and 1,445,978 shares of common
stock issuable upon the exercise of options and warrants to purchase
our
common stock.
|
(8)
|
Includes
101,500 shares of our common stock and 1,140,910 shares of our
common
stock issuable upon the exercise of warrants to purchase shares
of our
common stock.
|
(9)
|
Includes
32,435,225 shares of our common stock and 43,171,799 shares of
common stock issuable upon the exercise of options and warrants
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, 2005 - September 30, 2005
|
$0.36
|
|
$0.24
|
|
October
1, 2005 - December 31, 2005
|
$0.26
|
$0.17
|
||
2006
|
||||
January
1, 2006 - March 31, 2006
|
$0.30
|
$0.18
|
||
April 1, 2006 - April 19, 2006 |
$0.19
|
$0.23
|
|
Page(s)
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2005 and
December 31, 2005
|
F-2,
F-3
|
|
Condensed
Consolidated Statements of Operations for the Three Months and
Nine Months
Ended December 31, 2004 and 2005
|
F-4
|
|
Condensed
Consolidated Statements of Cash Flows for the Nine Months
Ended December 31, 2004 and 2005
|
F-5,
F-6
|
|
Notes
to Condensed Consolidated Financial Statements
|
F-7
to F-21
|
|
|
|
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-22
|
|
Consolidated
Balance Sheets as of March 31, 2005 and 2004
|
F-23,
F-24
|
|
Consolidated
Statements of Operations for the Years Ended
March 31, 2005 and 2004
|
F-25
|
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit)
for the Years Ended March 31, 2005 and 2004
|
F-26
|
|
Consolidated
Statements of Cash Flows for the Years Ended March 31, 2005 and
2004
|
F-27,
F-28
|
|
Notes
to Consolidated Financial Statements
|
F-29
to F-57
|
ASSETS
|
|||||||
March
31,
2005 |
December
31,
2005 |
||||||
(audited)
|
(unaudited)
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,669,787
|
$
|
4,960,703
|
|||
Restricted
cash
|
429,954
|
337,200
|
|||||
Accounts
receivable, net
|
12,658,313
|
11,376,784
|
|||||
Prepaid
expenses and other current assets
|
2,511,697
|
3,740,602
|
|||||
Total
Current Assets
|
20,269,751
|
20,415,289
|
|||||
FIXED
ASSETS, NET OF ACCUMULATED DEPRECIATION
|
13,193,056
|
14,286,154
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill,
net of impairment
|
32,579,099
|
37,310,829
|
|||||
Customer
contracts and relationships, net of amortization
|
2,965,456
|
8,669,910
|
|||||
Other
intangible assets, net of amortization
|
1,511,005
|
423,259
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
366,667
|
|||||
Other
assets
|
1,277,897
|
1,914,779
|
|||||
39,360,124
|
48,685,444
|
||||||
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
83,386,887
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
March
31,
2005 |
December
31,
2005 |
||||||
(audited)
|
(unaudited)
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of convertible debenture
|
$
|
-
|
$
|
3,500,000
|
|||
Current
portion of notes payable
|
25,535,263
|
6,817,581
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
16,873,156
|
|||||
Liability
for common stock to be issued
|
-
|
53,167
|
|||||
Deferred
revenue
|
3,470,731
|
4,442,492
|
|||||
Total
Current Liabilities
|
48,869,082
|
31,686,396
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Convertible
debenture, net of unamortized debt discount of $602,452 and
current
portion
|
-
|
10,897,548
|
|||||
Notes
payable and other long-term liabilities, net of current
maturities
|
999,196
|
800,659
|
|||||
Total
Long-Term Liabilities
|
999,196
|
11,698,207
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
43,384,603
|
|||||
MINORITY
INTERESTS
|
600,000
|
3,799,605
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock, $.001 par value, 20,035,425 shares authorized and
35,378 shares
issued and outstanding at March 31, 2005 and December 31,
2005
|
35
|
35
|
|||||
Common
stock, $.001 par value, 1,500,000,000 shares authorized and
355,918,011
and 432,161,235 shares issued and outstanding at March 31,
2005 and
December 31, 2005
|
355,918
|
432,161
|
|||||
Additional
paid-in capital
|
43,195,250
|
62,126,473
|
|||||
Additional
paid-in capital, stock warrant
|
-
|
853,200
|
|||||
Accumulated
deficit
|
(21,196,550
|
)
|
(27,209,190
|
)
|
|||
Total
Stockholders' Equity
|
22,354,653
|
36,202,679
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
72,822,931
|
$
|
83,386,887
|
For
the Three Months Ended
December 31, |
For
the Nine Months Ended
December 31, |
||||||||||||
2004
|
2005
|
2004
|
2005
|
||||||||||
REVENUES
|
$
|
17,127,133
|
$
|
26,244,606
|
$
|
23,265,366
|
$
|
75,297,101
|
|||||
OPERATING
COSTS AND EXPENSES
|
|||||||||||||
Cost
of services (exclusive of depreciation and amortization)
|
8,633,278
|
13,790,195
|
11,158,590
|
36,466,453
|
|||||||||
Payroll,
professional fees and related expenses
|
4,268,757
|
4,206,066
|
8,794,048
|
13,405,613
|
|||||||||
Advertising
and marketing expenses
|
686,129
|
1,064,475
|
852,766
|
2,382,332
|
|||||||||
Office
rent and expenses
|
355,686
|
522,703
|
508,216
|
1,415,523
|
|||||||||
Other
general and administrative expenses
|
4,439,560
|
6,590,282
|
4,889,344
|
16,970,288
|
|||||||||
Depreciation
and amortization
|
792,717
|
1,293,993
|
1,290,212
|
3,163,689
|
|||||||||
Goodwill
impairment
|
-
|
3,764,429
|
-
|
3,764,429
|
|||||||||
Restructuring
costs
|
-
|
1,335,612
|
-
|
1,335,612
|
|||||||||
Total
Operating Costs and Expenses
|
19,176,127
|
32,567,755
|
27,493,176
|
78,903,939
|
|||||||||
OPERATING
LOSS
|
(2,048,994
|
)
|
(6,323,149
|
)
|
(4,227,810
|
)
|
(3,606,838
|
)
|
|||||
INTEREST
EXPENSE, NET
|
(905,896
|
)
|
(582,785
|
)
|
(1,232,280
|
)
|
(2,213,295
|
)
|
|||||
MINORITY
INTERESTS IN NET INCOME OF CONSOLIDATED
SUBSIDIARIES
|
-
|
(49,798
|
)
|
-
|
(192,507
|
)
|
|||||||
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
(2,954,890
|
)
|
(6,955,732
|
)
|
(5,460,090
|
)
|
(6,012,640
|
)
|
|||||
Provision
for Income Taxes
|
-
|
-
|
-
|
-
|
|||||||||
NET
LOSS APPLICABLE TO COMMON SHARES
|
$
|
(2,954,890
|
)
|
$
|
(6,955,732
|
)
|
$
|
(5,460,090
|
)
|
$
|
(6,012,640
|
)
|
|
NET
LOSS PER SHARE
|
|||||||||||||
Basic
|
$
|
(0.0093
|
)
|
$
|
(0.0165
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
|
Diluted
|
$
|
(0.0093
|
)
|
$
|
(0.0165
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
317,287,577
|
421,105,524
|
270,117,287
|
390,067,725
|
For
the Nine Months Ended
December 31, |
|||||||
2004
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(5,460,090
|
)
|
$
|
(6,012,640
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by (used
in) operating
activities:
|
|||||||
Goodwill
impairment
|
-
|
3,764,429
|
|||||
Depreciation
and amortization
|
1,290,212
|
3,163,689
|
|||||
Restructuring
costs
|
-
|
1,335,612
|
|||||
Noncash
interest expense
|
375,150
|
536,810
|
|||||
Minority
interests
|
-
|
192,507
|
|||||
Investments
received for services
|
(450,000
|
)
|
-
|
||||
Other
|
15,000
|
38,019
|
|||||
Changes
in assets and liabilities
|
|||||||
Decrease
in accounts receivable
|
1,011,676
|
1,359,448
|
|||||
(Increase)
decrease in other current assets
|
743,283
|
(1,046,675
|
)
|
||||
(Increase)
in other assets
|
(90,377
|
)
|
(725,039
|
)
|
|||
Increase
(decrease) in accounts payable and accrued
expenses
|
4,055,926
|
(5,351,928
|
)
|
||||
Increase
in deferred revenue
|
431,247
|
95,353
|
|||||
Total
adjustments
|
7,382,117
|
3,362,225
|
|||||
Net
cash provided by (used in) operating activities
|
1,922,027
|
(2,650,415
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Acquisition
of intangible assets
|
-
|
(6,778,129
|
)
|
||||
Cash
paid for acquisitions
|
(32,960,500
|
)
|
(4,973,122
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
5,827,223
|
1,046,111
|
|||||
Capital
expenditures, net
|
(1,384,688
|
)
|
(2,674,904
|
)
|
|||
Net
cash (used in) investing activities
|
(28,517,965
|
)
|
(13,380,044
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Borrowings/(payments)
under convertible debenture, net
|
-
|
15,000,000
|
|||||
Borrowings
under acquisition bridge loan
|
15,200,000
|
-
|
|||||
Payments
on acquisition bridge loan
|
(2,200,000
|
)
|
(13,000,000
|
)
|
|||
Borrowings/(payments)
under notes payable, net
|
4,208,449
|
(4,902,372
|
)
|
||||
Investment
by minority interests
|
-
|
3,612,525
|
|||||
Debt
financing fees
|
-
|
(1,295,000
|
)
|
||||
Proceeds
from common stock issuances
|
13,098,406
|
16,906,222
|
|||||
|
|||||||
Net
cash provided by financing activities
|
|
30,306,855
|
|
16,321,375
|
|||
For
the Nine Months Ended
December 31, |
|||||||
2004
|
2005
|
||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
$
|
3,710,917
|
$
|
290,916
|
|||
CASH
AND CASH EQUIVALENTS - BEGINNING OF YEAR
|
1,955,607
|
4,669,787
|
|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
5,666,524
|
$
|
4,960,703
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Cash
paid during the period for interest
|
$
|
45,550
|
$
|
1,043,073
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Acquisition
of AFN
|
$
|
-
|
$
|
1,500,000
|
|||
Acquisition
of InReach Internet
|
$
|
-
|
$
|
950,000
|
|||
Acquisition
of Evergreen Broadband
|
$
|
-
|
$
|
231,073
|
|||
Acquisition
of WazAlliance
|
$
|
-
|
$
|
135,333
|
|||
Investment
banker retainer fee
|
$
|
-
|
$
|
58,500
|
|||
Conversion
of payables to common stock
|
$
|
90,000
|
$
|
-
|
|||
Debt
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
-
|
|||
Goodwill
recorded in acquisitions
|
$
|
31,893,329
|
$
|
5,743,263
|
|||
Amortization
of SEDA deferred financing fees
|
$
|
-
|
$
|
660,000
|
|||
Liability
for common stock to be issued
|
$
|
500,000
|
$
|
53,167
|
|||
Adjustment
to minority interest
|
$
|
-
|
$
|
150,000
|
|||
Note
payable in escrow
|
$
|
75,000
|
$
|
-
|
|||
|
For
the Nine Months
Ended December 31, |
|||||||
|
|
2004
|
|
|
2005
|
|
||
Net
loss, as reported
|
|
$
|
(5,460,090
|
)
|
|
$
|
(6,012,640
|
)
|
Add:
Stock-based employee compensation expense included in
reported net
loss
|
|
|
-
|
|
|
|
-
|
|
Deduct:
Total stock-based employee compensation expense determined
under fair
value based method for all awards
|
|
|
(6,093,029
|
)
|
|
|
(3,028,803
|
)
|
|
|
|
|
|
|
|
|
|
Pro
forma net loss
|
|
$
|
(11,553,120
|
)
|
|
$
|
(9,041,443
|
)
|
|
|
|
|
|
|
|
||
Net
loss per share:
|
|
|
|
|
|
|
|
|
As
reported
|
|
$
|
(0.0202
|
)
|
|
$
|
(0.0154
|
)
|
|
|
|
|
|
|
|
||
Pro
forma
|
|
$
|
(0.0428
|
)
|
|
$
|
(0.0232
|
)
|
|
|
|
|
|
|
|
|
|
2004
|
|
2005
|
|
||
Dividend
yield
|
|
None
|
|
None
|
|
||
Expected
volatility
|
|
|
60
|
%
|
|
60
|
%
|
Risk-free
interest rate
|
|
|
3.00
|
%
|
|
3.00
|
%
|
Expected
term (in years)
|
|
|
10.00
|
|
|
10.00
|
|
|
|
Estimated
Useful
Lives
(in years)
|
|
March
31,
2005 |
|
December
31,
2005
|
|
|||
|
|
|
|
(audited)
|
|
(unaudited)
|
|
|||
Furniture
and fixtures
|
|
|
7
|
|
$
|
387,861
|
|
$
|
471,816
|
|
Machinery
and equipment
|
|
|
5
|
|
|
13,584,088
|
|
|
16,587,715
|
|
Leasehold
improvements
|
|
|
7
|
|
|
263,452
|
|
|
638,584
|
|
Vehicles
|
|
|
5
|
|
|
287,733
|
|
|
226,470
|
|
Subtotals
|
|
|
|
|
|
14,523,134
|
|
|
17,924,585
|
|
Less
accumulated depreciation
|
|
|
|
|
|
(
1,330,078
|
)
|
|
(
3,638,431
|
)
|
Fixed
assets, net
|
|
|
|
|
$
|
13,193,056
|
|
$
|
14,286,154
|
|
|
|
March
31,
|
|
December
31,
|
|
||
|
|
2005
|
|
2005
|
|
||
|
|
(audited)
|
|
(unaudited)
|
|
||
Accounts
payable
|
|
$
|
14,083,842
|
|
$
|
12,331,292
|
|
Accrued
restructuring costs
|
|
|
-
|
|
|
1,335,612
|
|
Accrued
compensation
|
|
|
2,147,138
|
|
|
1,070,948
|
|
Accrued
interest expense
|
|
|
937,509
|
|
|
429,459
|
|
Other
accrued liabilities
|
|
|
2,694,599
|
|
|
1,705,845
|
|
Totals
|
|
$
|
19,863,088
|
|
$
|
16,873,156
|
|
|
|
Three
Months Ended
December 31, |
|
Nine
Months Ended
December 31, |
|
||||||||
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
18,724,342
|
|
$
|
26,244,606
|
|
$
|
28,056,994
|
|
$
|
76,859,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(2,862,304
|
)
|
|
(6,955,732
|
)
|
|
(5,182,331
|
)
|
|
(5,902,469
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.0087
|
)
|
|
(0.0165
|
)
|
|
(0.0185
|
)
|
|
(0.0149
|
)
|
Diluted
|
|
|
(0.0087
|
)
|
|
(0.0165
|
)
|
|
(0.0185
|
)
|
|
(0.0149
|
)
|
|
|
Three
Months Ended
December 31, |
|
Nine
Months Ended
December 31, |
|
||||||||
|
|
2004
|
2005
|
2004
|
2005
|
||||||||
Revenues
|
$
|
18,790,255
|
$
|
26,723,477
|
$
|
28,544,302
|
$
|
78,813,687
|
|||||
Net
loss
|
(2,982,966
|
)
|
(6,913,378
|
)
|
(5,421,255
|
)
|
(5,703,671
|
)
|
|||||
Net
loss per share:
|
|||||||||||||
Basic
|
(0.0093
|
)
|
(0.0164
|
)
|
(0.0198
|
)
|
(0.0145
|
)
|
|||||
Diluted
|
(0.0093
|
)
|
(0.0164
|
)
|
(0.0198
|
)
|
(0.0145
|
)
|
Convertible
debenture payable to Cornell Capital
|
$
|
15,000,000
|
||
Notes
payable to Cornell Capital
|
6,600,000
|
|||
Notes
payable related to acquisitions
|
42,909
|
|||
Other
notes payable and long-term obligations
|
975,331
|
|||
22,618,240
|
||||
Less:
Unamortized debt discount on convertible debenture
|
(602,452
|
)
|
||
Less:
Amounts due within one year
|
(10,317,581
|
)
|
||
Long-term
portion of debt
|
$
|
11,698,207
|
The
twelve-month period ending --
|
||||
December
31, 2007
|
$
|
7,510,888
|
||
December
31, 2008
|
4,789,771
|
|||
12,300,659
|
||||
Less
- Unamortized debt discount on convertible debenture
|
(602,452
|
)
|
||
Long-term
portion of debt
|
$
|
11,698,207
|
Number
of
|
Weighted-Average
|
||||||
Stock
Options --
|
Options
|
Exercise
Price
|
|||||
|
|||||||
Outstanding
- March 31, 2005
|
1,725,000
|
$
|
0.192
|
||||
Granted
|
8,696,000
|
$
|
0.231
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
-
|
$
|
-
|
||||
Outstanding
- December 31, 2005
|
10,421,000
|
$
|
0.225
|
||||
Exercisable
- December 31, 2005
|
1,085,416
|
$
|
0.176
|
Number
of
|
Weighted-Average
|
||||||
Stock
Warrants --
|
Warrants
|
Exercise
Price
|
|||||
|
|||||||
Outstanding
- March 31, 2005
|
61,232,500
|
$
|
0.117
|
||||
Granted
|
19,600,000
|
$
|
0.290
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
1,000,000
|
$
|
0.018
|
||||
Outstanding
- December 31, 2005
|
79,832,500
|
$
|
0.1609
|
||||
Exercisable
- December 31, 2005
|
68,284,353
|
$
|
0.1584
|
The
Three Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
December 31, 2004
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
12,391,227
|
$
|
4,735,906
|
$
|
-
|
$
|
-
|
$
|
17,127,133
|
||||||
Cost
of revenues
|
(6,327,807
|
)
|
(2,305,471
|
)
|
-
|
-
|
(8,633,278
|
)
|
||||||||
Other
operating expenses
|
(5,154,612
|
)
|
(1,942,579
|
)
|
(34,555
|
)
|
(2,618,386
|
)
|
(9,750,132
|
)
|
||||||
Depreciation
and amortization
|
(410,339
|
)
|
(158,731
|
)
|
(3,647
|
)
|
(220,000
|
)
|
(792,717
|
)
|
||||||
Interest
and other, net
|
83,312
|
(41,871
|
)
|
(70,216
|
)
|
(877,121
|
)
|
(905,896
|
)
|
|||||||
Net
income (loss)
|
$
|
581,781
|
$
|
287,254
|
$
|
(108,418
|
)
|
$
|
(3,715,507
|
)
|
$
|
(2,954,890
|
)
|
|||
Total
assets
|
$
|
35,024,547
|
$
|
18,245,134
|
$
|
15,267
|
$
|
20,583,028
|
$
|
73,867,976
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,599,256
|
$
|
1,250,436
|
$
|
10,940
|
$
|
-
|
$
|
12,860,632
|
||||||
Goodwill,
net of impairment
|
$
|
18,634,703
|
$
|
14,070,629
|
$
|
-
|
$
|
-
|
$
|
32,705,332
|
The
Three Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
December 31, 2005
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
18,505,132
|
$
|
4,534,617
|
$
|
3,204,857
|
$
|
-
|
$
|
26,244,606
|
||||||
Cost
of revenues
|
(9.862,109
|
)
|
(2,250,087
|
)
|
(1,678,000
|
)
|
-
|
(13,790,196
|
)
|
|||||||
Other
operating expenses
|
(7,621,737
|
)
|
(2,164,515
|
)
|
(1,877,055
|
)
|
(720,218
|
)
|
(12,383,525
|
)
|
||||||
Depreciation
and amortization
|
(999,883
|
)
|
(101,227
|
)
|
(192,883
|
)
|
-
|
(1,293,993
|
)
|
|||||||
Goodwill
impairment
|
(1,818,910
|
)
|
(1,945,519
|
)
|
-
|
-
|
(3,764,429
|
)
|
||||||||
Restructuring
costs
|
-
|
(1,335,612
|
)
|
-
|
-
|
(1,335,612
|
)
|
|||||||||
Interest,
net
|
18,809
|
(2,271
|
)
|
21,093
|
(620,416
|
)
|
(582,785
|
)
|
||||||||
Minority
interests
|
-
|
-
|
(49,798
|
)
|
-
|
(49,798
|
)
|
|||||||||
Net
loss
|
$
|
(1,778,698
|
)
|
$
|
(3,264,614
|
)
|
$
|
(571,786
|
)
|
$
|
(1,340,634
|
)
|
$
|
(6,955,732
|
)
|
|
Total
assets
|
$
|
51,450,926
|
$
|
19,681,335
|
$
|
10,923,229
|
$
|
1,331,397
|
$
|
83,386,887
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,431,676
|
$
|
1,701,120
|
$
|
1,153,358
|
$
|
-
|
$
|
14,286,154
|
||||||
Goodwill,
net of impairment
|
$
|
20,568,280
|
$
|
16,248,330
|
$
|
494,219
|
$
|
-
|
$
|
37,310,829
|
The
Nine Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
December 31, 2004
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
13,346,798
|
$
|
9,303,568
|
$
|
-
|
$
|
615,000
|
$
|
23,265,366
|
||||||
Cost
of revenues
|
(6,794,042
|
)
|
(4,364,548
|
)
|
-
|
-
|
(11,158,590
|
)
|
||||||||
Other
operating expenses
|
(5,520,495
|
)
|
(3,730,718
|
)
|
(813,266
|
)
|
(4,979,895
|
)
|
(15,044,374
|
)
|
||||||
Depreciation
and amortization
|
(438,259
|
)
|
(327,679
|
)
|
(10,941
|
)
|
(513,333
|
)
|
(1,290,212
|
)
|
||||||
Interest
and other, net
|
83,312
|
(83,126
|
)
|
(70,216
|
)
|
(1,162,250
|
)
|
(1,232,280
|
)
|
|||||||
Net
income (loss)
|
$
|
677,314
|
$
|
797,497
|
$
|
(894,423
|
)
|
$
|
(6,040,478
|
)
|
$
|
(5,460,090
|
)
|
|||
The
Nine Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
December 31, 2005
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
56,301,164
|
$
|
12,395,635
|
$
|
6,600,302
|
$
|
-
|
$
|
75,297,101
|
||||||
Cost
of revenues
|
(27,113,902
|
)
|
(5,988,818
|
)
|
(3,363,733
|
)
|
-
|
(36,466,453
|
)
|
|||||||
Other
operating expenses
|
(22,853,007
|
)
|
(5,600,769
|
)
|
(4,031,131
|
)
|
(1,688,849
|
)
|
(34,173,756
|
)
|
||||||
Depreciation
and amortization
|
(2,511,742
|
)
|
(268,154
|
)
|
(376,500
|
)
|
(7,293
|
)
|
(3,163,689
|
)
|
||||||
Goodwill
impairment
|
(1,818,910
|
)
|
(1,945,519
|
)
|
-
|
-
|
(3,764,429
|
)
|
||||||||
Restructuring
costs
|
-
|
(1,335,612
|
)
|
-
|
-
|
(1,335,612
|
)
|
|||||||||
Interest,
net
|
10,769
|
(15,886
|
)
|
30,294
|
(2,238,472
|
)
|
(2,213,295
|
)
|
||||||||
Minority
interests
|
35,645
|
-
|
(228,152
|
)
|
-
|
(192,507
|
)
|
|||||||||
Net
income (loss)
|
$
|
2,050,017
|
$
|
(2,759,123
|
)
|
$
|
(1,368,920
|
)
|
$
|
(3,934,614
|
)
|
$
|
(6,012,640
|
)
|
ASSETS
|
|||||||
|
|
|
2005
|
2004
|
|||
CURRENT ASSETS | |||||||
Cash
and cash equivalent
|
$
|
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
|
2005
|
2004
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of long-term debt and notes payable
|
$
|
19,035,263
|
$
|
63,633
|
|||
Notes
payable
|
6,500,000
|
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
|
|||
|
|
|
|||||
OPERATING
COSTS AND EXPENSES
|
|
|
|||||
Cost
of services (exclusive of depreciation and amortization)
|
22,551,240
|
117,349
|
|||||
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 Costs and Expenses
|
$
|
50,029,303
|
$
|
2,094,507
|
|||
|
|
|
|||||
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
|
3,141,501
|
|
(647,536
|
)
|
|||
Total
adjustments
|
5,999,384
|
|
(188,666
|
)
|
|||
Net
cash provided by (used in) operating activities
|
639,662
|
|
(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
|
13,098,406
|
3,145,000
|
|||||
Payments
of other convertible debentures
|
-
|
|
(50,000
|
)
|
|||
Change
in convertible debentures - officers, net
|
-
|
|
(97,617 |
)
|
|||
Proceeds
(payments) of long-term debt, net
|
19,411,335 |
|
1,601,262
|
|
|||
Net
cash provided by financing activities
|
32,509,741
|
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 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
|
|
|
Years
Ended
March
31,
|
||||||
|
2005
|
2004
|
|||||
Statutory
federal income tax rate
|
(35.0
|
)%
|
(35.0
|
)%
|
|||
State
income taxes, net of federal benefit
|
(3.0
|
)
|
(3.0
|
)
|
|||
Permanent
differences
|
0.2
|
0.1
|
|||||
Tax
credits
|
-
|
-
|
|||||
Change
in valuation allowance
|
37.8
|
37.9
|
|||||
|
|||||||
Effective
tax rate
|
-
|
%
|
-
|
%
|
|||
March
31,
|
|||||||
2005
|
2004
|
||||||
Net
operating loss carryforwards
|
$
|
6,033,340
|
$
|
3,995,340
|
|||
Depreciation
|
(50,051
|
)
|
(39,192
|
)
|
|||
Valuation
allowance
|
(5,983,288
|
)
|
(3,956,147
|
)
|
|||
|
|||||||
Total
net deferred tax asset
|
$
|
-
|
$
|
-
|
Wireless
|
Voice
|
Internet
|
||||||||||||||
|
|
Corporate
|
|
Networks
|
|
Services
|
Services
|
Total
|
||||||||
Revenues
|
$
|
615,000
|
$
|
-
|
$
|
32,009,084
|
$
|
13,884,060
|
$
|
46,508,144
|
||||||
Cost
of revenues (exclusive of depreciation and amortization)
|
-
|
-
|
15,816,901
|
6,734,339
|
22,551,240
|
|||||||||||
Other
operating expenses
|
1,287,945
|
953,976
|
16,707,959
|
6,460,970
|
25,410,850
|
|||||||||||
Depreciation
and amortization
|
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
|
|
|
Corporate
|
|
Wireless Networks |
|
Voice
Services |
Internet
Services |
Total
|
||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
311,355
|
$
|
311,355
|
||||||
Cost
of revenues (exclusive of depreciation and amortization)
|
-
|
-
|
-
|
117,349
|
117,349
|
|||||||||||
Other
operating expenses
|
701,758
|
1,115,946
|
-
|
138,454
|
1,956,158
|
|||||||||||
Depreciation
and amortization
|
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
|
|
|
|
|
CloseCall
|
|
|
|
World
Trade
|
|
Affinity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Davel
|
|
America
|
|
The
River
|
|
Network
|
|
Telecom
|
|
Web
One
|
|
Ticon.net
|
|
Clover
|
|
Crescent
|
|
Shrevenet
|
|
August.net
|
|
Totals
|
|
||||||||||||
Acquisition
Cost
|
|||||||||||||||||||||||||||||||||||||
Cash
|
$
|
14,000,000
|
$
|
8,000,000
|
$
|
1,690,732
|
$
|
1,200,000
|
$
|
1,513,000
|
$
|
1,660,000
|
$
|
750,000
|
$
|
707,736
|
$
|
944,767
|
$
|
1,060,000
|
$
|
1,730,000
|
$
|
33,256,235
|
|||||||||||||
Transaction
fees and expenses
|
425,000
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
425,000
|
|||||||||||||||||||||||||
Note(s)
payable
|
-
|
-
|
776,472
|
-
|
-
|
-
|
250,000
|
542,264
|
250,000
|
-
|
-
|
1,818,736
|
|||||||||||||||||||||||||
Stock
warrants
|
333,500
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
333,500
|
|||||||||||||||||||||||||
Common
stock
|
-
|
10,000,000
|
-
|
-
|
1,000,000
|
300,000
|
-
|
-
|
-
|
190,000
|
-
|
11,490,000
|
|||||||||||||||||||||||||
Excess
of liabilities assumed over assets acquired
|
-
|
-
|
192,545
|
109,986
|
-
|
349,054
|
564,876
|
-
|
-
|
-
|
33,986
|
1,250,447
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
Aggregate
purchase price amounts
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,659,749
|
$
|
1,309,986
|
$
|
2,513,000
|
$
|
2,309,054
|
$
|
1,564,876
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,763,986
|
$
|
48,573,918
|
|||||||||||||
Number
of Shares Issued
|
-
|
39,999,999
|
-
|
-
|
5,000,000
|
1,500,000
|
-
|
-
|
-
|
878,816
|
-
|
47,378,815
|
|||||||||||||||||||||||||
Net
Assets of Acquired Companies
|
|||||||||||||||||||||||||||||||||||||
Aggregate
purchase price amounts
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,659,749
|
$
|
1,309,986
|
$
|
2,513,000
|
$
|
2,309,054
|
$
|
1,564,876
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,763,986
|
$
|
48,573,918
|
|||||||||||||
Excess
of liabilities assumed over assets acquired
|
-
|
-
|
(192,545
|
)
|
(109,986
|
)
|
-
|
(349,054
|
)
|
(564,876
|
)
|
-
|
-
|
-
|
(33,986
|
)
|
(1,250,447
|
)
|
|||||||||||||||||||
Net
Assets of Acquired Companies
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,467,204
|
$
|
1,200,000
|
$
|
2,513,000
|
$
|
1,960,000
|
$
|
1,000,000
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,730,000
|
$
|
47,323,471
|
|||||||||||||
Cash
and cash equivalents
|
$
|
3,854,576
|
$
|
1,588,292
|
$
|
104,730
|
$
|
19,468
|
$
|
75,629
|
$
|
-
|
$
|
(22,766
|
)
|
$
|
13,119
|
$
|
-
|
$
|
31,098
|
$
|
26,337
|
$
|
5,690,483
|
||||||||||||
Accounts
receivable, net
|
7,021,222
|
3,047,642
|
4,975
|
34,111
|
553,424
|
162,126
|
117,832
|
46,280
|
250,674
|
129,348
|
105,852
|
11,473,485
|
|||||||||||||||||||||||||
Other
current assets
|
740,918
|
1,366,134
|
6,370
|
105,093
|
16,422
|
-
|
2,854
|
19,298
|
27,027
|
42,982
|
-
|
2,327,097
|
|||||||||||||||||||||||||
Fixed
assets
|
11,830,544
|
347,620
|
50,344
|
126,794
|
71,140
|
74,558
|
299,033
|
234,520
|
277,838
|
167,476
|
130,437
|
13,610,304
|
|||||||||||||||||||||||||
Goodwill
|
-
|
16,470,541
|
2,659,749
|
1,309,986
|
2,073,162
|
2,309,054
|
1,564,876
|
1,186,942
|
900,623
|
1,020,703
|
1,763,986
|
31,259,622
|
|||||||||||||||||||||||||
Location
contracts
|
3,321,857
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,321,857
|
|||||||||||||||||||||||||
Other
intangible assets
|
-
|
248,178
|
391,466
|
326,364
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
966,008
|
|||||||||||||||||||||||||
Other
assets
|
1,186,407
|
11,513
|
45,582
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,243,502
|
|||||||||||||||||||||||||
Total
Assets
|
27,955,524
|
23,079,920
|
3,263,216
|
1,921,815
|
2,789,777
|
2,545,738
|
1,961,829
|
1,500,158
|
1,456,161
|
1,391,607
|
2,026,612
|
69,892,358
|
|||||||||||||||||||||||||
Minority
Interest
|
600,000
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
600,000
|
|||||||||||||||||||||||||
Current
portion of notes payable
|
-
|
61,144
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
61,144
|
|||||||||||||||||||||||||
Accounts
payable and accrued expenses
|
12,597,024
|
3,703,857
|
354,892
|
409,196
|
276,777
|
246,338
|
187,174
|
51,819
|
87,921
|
64,008
|
151,607
|
18,130,613
|
|||||||||||||||||||||||||
Deferred
revenue
|
-
|
1,178,199
|
358,348
|
262,008
|
-
|
339,400
|
774,655
|
198,339
|
125,292
|
77,599
|
145,005
|
3,458,845
|
|||||||||||||||||||||||||
Notes
payable and other long-term liabilities, net
|
-
|
136,720
|
82,772
|
50,611
|
-
|
-
|
-
|
-
|
48,181
|
-
|
-
|
318,284
|
|||||||||||||||||||||||||
Total
Liabilities
|
12,597,024
|
5,079,920
|
796,012
|
721,815
|
276,777
|
585,738
|
961,829
|
250,158
|
261,394
|
141,607
|
296,612
|
21,968,886
|
|||||||||||||||||||||||||
Net
Assets Acquired
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,467,204
|
$
|
1,200,000
|
$
|
2,513,000
|
$
|
1,960,000
|
$
|
1,000,000
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,730,000
|
$
|
47,323,471
|
CloseCall
|
World
Trade
|
Affinity
|
Proforma
|
Proforma
|
|||||||||||||||||||||||||||||||||
Mobilepro
|
Davel
|
America
|
The
River
|
Network
|
Web
One
|
Telecom
|
Ticon.net
|
Clover
|
Crescent
|
Adjustments
|
Results
|
||||||||||||||||||||||||||
(6
Months
|
(9
Months
|
(4
Months
|
(8
Months
|
(6
Months
|
(6
Months
|
(6
Months
|
(6
Months
|
(6
Months
|
|||||||||||||||||||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||||||||||||||||||
9/30/04)
|
9/30/04)
|
8/31/04)
|
8/31/04)
|
6/30/04)
|
6/30/04)
|
6/30/04)
|
6/30/04)
|
6/21/04)
|
|||||||||||||||||||||||||||||
REVENUES
|
$
|
46,508,144
|
$
|
28,724,000
|
$
|
17,594,548
|
$
|
1,431,590
|
$
|
1,948,267
|
$
|
1,049,336
|
$
|
2,070,807
|
$
|
1,038,517
|
$
|
662,746
|
$
|
847,551
|
$
|
-
|
$
|
101,875,506
|
|||||||||||||
COSTS
OF REVENUES
|
22,551,240
|
19,590,000
|
9,830,799
|
683,843
|
941,834
|
380,285
|
895,057
|
425,106
|
335,018
|
680,830
|
-
|
56,314,012
|
|||||||||||||||||||||||||
GROSS
PROFIT
|
23,956,904
|
9,134,000
|
7,763,749
|
747,747
|
1,006,433
|
669,051
|
1,175,750
|
613,411
|
327,728
|
166,721
|
-
|
45,561,494
|
|||||||||||||||||||||||||
OPERATING
EXPENSES
|
27,478,063
|
10,033,000
|
7,278,721
|
656,006
|
1,057,706
|
729,470
|
948,665
|
698,997
|
331,498
|
657,395
|
-
|
49,869,521
|
|||||||||||||||||||||||||
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
(3,521,159
|
)
|
(899,000
|
)
|
485,028
|
91,741
|
(51,273
|
)
|
(60,419
|
)
|
227,085
|
(85,586
|
)
|
(3,770
|
)
|
(490,674
|
)
|
-
|
(4,308,027
|
)
|
|||||||||||||||||
OTHER
INCOME (EXPENSE)
|
(1,838,563
|
)
|
(4,124,000
|
)
|
2,587
|
(18,462
|
)
|
(2,848
|
)
|
(3,107
|
)
|
(12,000
|
)
|
(41,506
|
)
|
8,255
|
(20,326
|
)
|
(1,748,000
|
)
|
(7,797,970
|
)
|
|||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
(5,359,722
|
)
|
(5,023,000
|
)
|
487,615
|
73,279
|
(54,121
|
)
|
(63,526
|
)
|
215,085
|
(127,092
|
)
|
4,485
|
(511,000
|
)
|
(1,748,000
|
)
|
(12,105,997
|
)
|
|||||||||||||||||
Provision
for income taxes
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||
NET
LOSS APPLICABLE TO COMMON SHARES
|
$
|
(5,359,722
|
)
|
$
|
(5,023,000
|
)
|
$
|
487,615
|
$
|
73,279
|
$
|
(54,121
|
)
|
$
|
(63,526
|
)
|
$
|
215,085
|
$
|
(127,092
|
)
|
$
|
4,485
|
$
|
(511,000
|
)
|
$
|
(1,748,000
|
)
|
$
|
(12,105,997
|
)
|
|||||
NET
LOSS PER BASIC AND DILUTED SHARES
|
$
|
(0.02
|
)
|
$
|
(0.04
|
)
|
|||||||||||||||||||||||||||||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||||||||||||||||||||||||||||||||
SHARES
OUTSTANDING
|
289,933,904
|
-
|
21,666,666
|
-
|
-
|
562,500
|
1,666,667
|
-
|
-
|
-
|
313,829,737
|
||||||||||||||||||||||||||
ACQUISITION
DATE
|
11/15/04
|
10/15/04
|
9/16/04
|
9/15/04
|
8/13/04
|
8/2/04
|
7/14/04
|
7/6/04
|
6/21/04
|
||||||||||||||||||||||||||||
NOTE
1> August.net acquired on April 21, 2004
|
|||||||||||||||||||||||||||||||||||||
NOTE
2> Shrevenet acquired on June 3, 2004
|
CloseCall
|
World
Trade
|
Affinity
|
Proforma
|
Proforma
|
||||||||||||||||||||||||||||||||||||||||||
Mobilepro
|
Davel
|
America
|
The
River
|
Network
|
Web
One
|
Telecom
|
Ticon.net
|
Clover
|
Crescent
|
Shrevenet
|
August.net
|
DFW
|
Adjustments
|
Results
|
||||||||||||||||||||||||||||||||
(12
Months |
(12
Months |
(12
Months
|
(12
Months
|
(12
Months
|
(12
Months
|
(12
Months
|
(12
Months
|
(12
Months |
(12
Months
|
(12
Months
|
(12
Months |
|||||||||||||||||||||||||||||||||||
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||||||||||||||||||||||||
12/31/03)
|
12/31/03)
|
4/30/04)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
12/31/03)
|
|||||||||||||||||||||||||||||||||||
REVENUES
|
$
|
311,355
|
$
|
81,773,000
|
$
|
24,353,746
|
$
|
4,752,175
|
$
|
3,543,871
|
$
|
2,276,657
|
$
|
2,344,635
|
$
|
2,099,265
|
$
|
1,534,049
|
$
|
1,854,289
|
$
|
2,024,627
|
$
|
1,511,340
|
$
|
1,764,260
|
$
|
-
|
$
|
130,143,269
|
||||||||||||||||
COSTS
OF REVENUES
|
117,349
|
60,641,000
|
13,742,826
|
2,218,434
|
1,530,271
|
755,167
|
912,414
|
908,377
|
588,661
|
1,359,690
|
806,540
|
810,039
|
904,377
|
-
|
85,295,145
|
|||||||||||||||||||||||||||||||
GROSS
PROFIT
|
194,006
|
21,132,000
|
10,610,920
|
2,533,741
|
2,013,600
|
1,521,490
|
1,432,221
|
1,190,888
|
945,388
|
494,599
|
1,218,087
|
701,301
|
859,883
|
-
|
44,848,124
|
|||||||||||||||||||||||||||||||
OPERATING
EXPENSES
|
1,977,158
|
32,739,000
|
10,358,897
|
2,275,667
|
2,176,035
|
1,555,136
|
1,460,427
|
1,266,873
|
873,436
|
1,919,626
|
1,212,492
|
688,840
|
788,570
|
-
|
59,292,157
|
|||||||||||||||||||||||||||||||
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
(1,783,152
|
)
|
(11,607,000
|
)
|
252,023
|
258,074
|
(162,435
|
)
|
(33,646
|
)
|
(28,206
|
)
|
(75,985
|
)
|
71,952
|
(1,425,027
|
)
|
5,595
|
12,461
|
71,313
|
-
|
(14,444,033
|
)
|
|||||||||||||||||||||||
OTHER
INCOME (EXPENSE)
|
(374,692
|
)
|
(34,584,000
|
)
|
(88,361
|
)
|
(230,857
|
)
|
(10,903
|
)
|
(8,737
|
)
|
(10,000
|
)
|
(10,322
|
)
|
23,652
|
(30,832
|
)
|
(38,821
|
)
|
-
|
(33,456
|
)
|
(3,496,000
|
)
|
(11,752,329
|
)
|
||||||||||||||||||
27,141,000
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
(2,157,844
|
)
|
(46,191,000
|
)
|
163,662
|
27,217
|
(173,338
|
)
|
(42,383
|
)
|
(38,206
|
)
|
(86,307
|
)
|
95,604
|
(1,455,859
|
)
|
(33,226
|
)
|
12,461
|
37,857
|
(3,496,000
|
)
|
(26,196,362
|
)
|
|||||||||||||||||||||
Provision
for income taxes
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||||
NET
LOSS APPLICABLE TO COMMON SHARES
|
$
|
(2,157,844
|
)
|
$
|
(46,191,000
|
)
|
$
|
163,662
|
$
|
27,217
|
$
|
(173,338
|
)
|
$
|
(42,383
|
)
|
$
|
(38,206
|
)
|
$
|
(86,307
|
)
|
$
|
95,604
|
$
|
(1,455,859
|
)
|
$
|
(33,226
|
)
|
$
|
12,461
|
$
|
37,857
|
$
|
(3,496,000
|
)
|
$
|
(26,196,362
|
)
|
||||||
NET
LOSS PER BASIC AND DILUTED SHARES
|
$
|
(0.02
|
)
|
$
|
(0.15
|
)
|
||||||||||||||||||||||||||||||||||||||||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
||||||||||||||||||||||||||||||||||||||||||||||
SHARES
OUTSTANDING
|
111,591,658
|
-
|
39,999,999
|
-
|
-
|
1,500,000
|
5,000,000
|
-
|
-
|
-
|
878,816
|
-
|
17,682,284
|
176,652,757
|
||||||||||||||||||||||||||||||||
ACQUISITION
DATE
|
11/15/04
|
10/15/04
|
9/16/04
|
9/15/04
|
8/13/04
|
8/2/04
|
7/14/04
|
7/6/04
|
6/21/04
|
6/3/04
|
4/21/04
|
1/20/04
|
||||||||||||||||||||||||||||||||||
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
---------------------
115,213,110
Shares of Common Stock
MOBILEPRO
CORP.
May
__ , 2006
|
|
|
|
|
-----------------------
|
|
|
|
|
|
|
|
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 by and among Registrant, Neoreach, Inc.,
Transcordia
Acquisition Corp., Transcordia, LLC and its Unit Holders,
dated April
2005
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Form 10-QSB filed August
15, 2005
|
||
2.18
|
Agreement
and Plan of Merger by and among Registrant, Neoreach, Inc.,
Neoreach
Wireless, Inc., Evergreen Open Broadband Corporation, and
Certain
Shareholders
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Form 10-QSB filed August
15, 2005
|
||
2.19
|
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
|
||
2.20
|
Agreement
and Plan of Merger, dated October 31, 2005, by and among
the Company,
InReach Internet, Inc., InReach Internet, LLC, and Balco
Holdings,
Inc.
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on November 7, 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
|
||
4.7
|
Registration
Rights Agreement, dated November 1, 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 November 7, 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
|
||
10.47
|
Master
Agreement for Services between Sprint Communications
Company L.P. and Kite
Broadband, LLC, dated May 20, 2005*
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Form 10-QSB filed November
14, 2005
|
||
10.48
|
Agreement
between the City of Tempe and NeoReach, Inc. for the
Use of City Property
in Connection with the Operation of a WiFi Network, dated
August 17,
2005
|
Provided herewith | ||
10.49
|
Executive Employment Agreement
dated February 1,
2006, between Jerry M. Sullivan, Jr. and the Company
|
Incorporated by reference to Exhibit
10.1 to the
Registrant’s Current Report on Form 8-K filed February 13,
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, Levine & Company, L.L.C.
|
Provided
herewith
|
23.2
|
Consent
of Schiff Hardin LLP
|
Provided
herewith (see Exhibit 5.1)
|
||
99.1
|
Press
Release dated December 28, 2005 regarding corporate
restructuring
|
Incorporated by reference to Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed January 1, 2006. |
SIGNATURE
|
|
TITLE
|
|
DATE
|
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/s/
Jay O. Wright
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Chief
Executive Officer,
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May
2, 2006
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Jay
O. Wright
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Principal
Executive Officer and Director
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/s/ Richard
H. Deily
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Senior
Vice President, Chief Accounting Officer, Principal Financial
and
Principal Accounting Officer
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May
2, 2006
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Richard
H. Deily
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/s/
Jack W. Beech
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Vice
President, Technology, and Director
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May
1, 2006
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Jack
W. Beech
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/s/
Chris MacFarland
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Director
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May
1, 2006
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Chris
MacFarland
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/s/
Michael G. O’Neil
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Director
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May
1, 2006
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Michael
G. O’Neil
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/s/
Don Sledge
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Director
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May
1, 2006
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Don
Sledge
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/s/ Jerry Sullivan |
President,
Chief Operating Officer, and Director
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May
1, 2006
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Jerry Sullivan |