|
|
|
|
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
|
Title
Of Each Class Of
Securities
To Be Registered
|
Amount
To Be
Registered
|
Proposed
Maximum
Offering
Price
Per
Share (1)
|
Proposed
Maximum
Aggregate
Offering
Price
(1)
|
Amount
Of
Registration
Fee
|
||
Common
stock, par value $0.001 per share
|
124,082,025
|
Shares
|
$0.194
|
$24,071,913
|
$2,833.24
|
(1)
|
Estimated
solely for the purpose of calculating the registration fee pursuant
to
Rule 457(c) under the Securities Act of 1933. For the purposes
of this
table, we have used the closing price of our common stock on
January 17,
2006.
|
1
|
||
THE
OFFERING
|
2
|
|
SUMMARY
FINANCIAL INFORMATION
|
3
|
|
RISK
FACTORS
|
4
|
|
SELLING
STOCKHOLDERS
|
12
|
|
FORWARD-LOOKING
STATEMENTS
|
15
|
|
DESCRIPTION
OF BUSINESS
|
15
|
|
DESCRIPTION
OF PROPERTY
|
37
|
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
|
38
|
|
MANAGEMENT
|
45
|
|
LEGAL
PROCEEDINGS
|
52
|
|
PRINCIPAL
STOCKHOLDERS
|
53
|
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
55
|
|
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS
|
55
|
|
DESCRIPTION
OF SECURITIES
|
56
|
|
EXPERTS
|
57
|
|
LEGAL
MATTERS
|
57
|
|
AVAILABLE
INFORMATION
|
57
|
|
FINANCIAL
STATEMENTS
|
F-1
|
Wireless
Networks
|
Our
broadband wireless network deployment efforts are being conducted
by our
wholly-owned subsidiary, NeoReach, Inc., and its subsidiary,
NeoReach
Wireless, Inc. (“NeoReach Wireless”). This segment also includes the
operations of our 51%-owned subsidiary, Kite Broadband LLC,
a wireless
broadband Internet service provider located in Ridgeland, Mississippi.
We
also have executed a letter of intent to acquire the remaining
49% of Kite
Broadband, LLC that we do not already own and 100% of Kite
Networks, Inc.,
an affiliate of Kite Broadband, LLC that provides certain consulting
and
implementation services to Kite Broadband, LLC.
|
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, such as the Baby Bells) 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 59% of the revenues of the voice services segment
in the six
months ended September 30, 2005.
|
Internet
Services
|
Our
internet services segment is led by DFW Internet Services,
Inc. (“DFW”,
doing business as Nationwide Internet), an Internet services
provider
based in Irving, Texas, and its acquired Internet service provider
subsidiaries. Our Internet services segment provides broadband
and dial-up
internet access, web-hosting services and related Internet
services to
business and residential customers in over 40 states. Over
80% of our
customers in this business segment are dial-up
customers.
|
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 |
Six Months Ended
September 30, 2005 |
||||||||||||
Business
Segment
|
$s
|
%
of Revenues
|
$s
|
%
of Revenues
|
|||||||||
Voice
|
$
|
32,009,084
|
68.8
|
%
|
$
|
37,796,032
|
77.1
|
%
|
|||||
Internet
Services
|
13,884,060
|
29.9
|
7,861,019
|
16.0
|
|||||||||
Wireless
Networks
|
-
|
-
|
3,395,444
|
6.9
|
|||||||||
Corporate
|
615,000
|
1.3
|
-
|
-
|
|||||||||
Total
Revenues
|
$
|
46,508,144
|
100.0
|
%
|
$
|
49,052,495
|
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 1,846,733 shares of our common stock that were issued
to the
former stockholders upon the conversion of convertible promissory
notes
obtained in connection with the acquisition of The River Internet
Access
Co.
|
·
|
Cornell
Capital Partners, L.P. that owns 4,995,000 shares of our common
stock
acquired in connection with the negotiation of the $100 million
Standby
Equity Distribution Agreement, and that holds a debenture that
is
convertible into 51,666,667 shares of our common stock and a warrant
to
purchase up to 6,000,000 shares of our common stock.
|
·
|
Certain
holders of warrants to purchase collectively up to 5,600,000 shares
of our
common stock that were issued in connection with the bridge financing
of
our acquisition of Davel.
|
·
|
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 32,950,000
shares of our common stock that were issued to current and former
employees, consultants, advisors and directors.
|
Common
Stock Offered
|
124,082,025
shares of our common stock by selling stockholders (the number
of shares
being registered in this offering will represent approximately
23.10% of
the total number of shares of common stock outstanding upon their
issuance).
|
Offering
Price
|
Market
price.
|
||
|
|
||
Common
Stock Outstanding Before the Offering
|
432,161,236
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 Six
Months
Ended
September
30, 2004
|
For
the Six
Months
Ended
September
30, 2005
|
||||||||||
Statement
of Operations Data:
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
Revenues
|
$
|
311,355
|
$
|
46,508,144
|
$
|
6,138,233
|
$
|
49,052,495
|
|||||
|
|||||||||||||
Operating
Costs and Expenses
|
2,094,507
|
50,029,303
|
8,317,049
|
46,336,184
|
|||||||||
|
|||||||||||||
Operating
Income (Loss)
|
(1,783,152
|
)
|
(3,521,159
|
)
|
(2,178,816
|
)
|
2,716,311
|
||||||
|
|||||||||||||
Other
Income (Expenses)
|
(374,692
|
)
|
(1,838,563
|
)
|
(326,384
|
)
|
(1,630,510
|
)
|
|||||
|
|||||||||||||
Minority
Interests
|
-
|
-
|
-
|
(142,709
|
)
|
||||||||
Net
Income (Loss) Applicable to Common Shares
|
$
|
(2,157,844
|
)
|
$
|
(5,359,722
|
)
|
$
|
(2,505,200
|
)
|
$
|
943,092
|
||
|
|||||||||||||
Net
Income (Loss) Per Share
|
|||||||||||||
Basic
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0102
|
)
|
$
|
0.0025
|
||
|
|||||||||||||
Diluted
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0102
|
)
|
$
|
0.0023
|
March
31,
2004 |
March
31,
2005
|
September
30,
2005
|
||||||||
Balance
Sheet Data:
|
|
|
|
|||||||
|
|
|
|
|||||||
Assets
|
|
|
|
|||||||
Cash
and Cash Equivalents
|
$
|
1,955,607
|
$
|
4,669,787
|
$
|
7,860,528
|
||||
|
||||||||||
Total
Current Assets
|
2,106,143
|
20,269,751
|
24,410,371
|
|||||||
|
||||||||||
Total
Non-Current Assets
|
1,252,030
|
52,553,180
|
62,750,447
|
|||||||
|
||||||||||
Total
Assets
|
$
|
3,358,173
|
$
|
72,822,931
|
$
|
87,160,818
|
||||
|
||||||||||
Liabilities
|
||||||||||
Total
Current Liabilities
|
$
|
2,511,654
|
$
|
48,869,082
|
$
|
32,812,038
|
||||
|
||||||||||
Total
Long-Term Liabilities
|
560,200
|
999,196
|
12,619,950
|
|||||||
|
||||||||||
Total
Liabilities
|
3,071,854
|
49,868,278
|
45,431,988
|
|||||||
|
||||||||||
Minority
Interests
|
-
|
600,000
|
3,817,708
|
|||||||
|
||||||||||
Total
Stockholders’ Equity
|
286,319
|
22,354,653
|
37,911,122
|
|||||||
|
||||||||||
Total
Liabilities and Stockholders’ Equity
|
$
|
3,358,173
|
$
|
72,822,931
|
$
|
87,160,818
|
•
|
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
|
2.31
|
%
|
-
|
10,000,000
|
(2)
|
|
0.00
|
%
|
|||||||||||||
Paul
Sadler
|
2,200,000
|
0.51
|
%
|
-
|
2,200,000
|
(3)
|
|
0.00
|
%
|
|||||||||||||
Marcus
Needham
|
139,057
|
0.03
|
%
|
-
|
139,057
|
0.00
|
%
|
|||||||||||||||
Robert
Malecki
|
43,913
|
0.01
|
%
|
-
|
43,913
|
0.00
|
%
|
|||||||||||||||
Tom
Millitzer
|
7,026
|
0.00
|
%
|
-
|
7,026
|
0.00
|
%
|
|||||||||||||||
Paul
Halvorsen
|
14,638
|
0.00
|
%
|
-
|
14,638
|
0.00
|
%
|
|||||||||||||||
Estate
of Roger L. Beck, Jr.
|
587,471
|
0.14
|
%
|
-
|
587,471
|
0.00
|
%
|
|||||||||||||||
Jansen
Blanton
|
355,893
|
0.08
|
%
|
-
|
355,893
|
0.00
|
%
|
|||||||||||||||
Jared
B. Reimer
|
153,156
|
0.04
|
%
|
-
|
153,156
|
0.00
|
%
|
|||||||||||||||
Dr.
Ronald Reimer
|
72,456
|
0.02
|
%
|
-
|
72,456
|
0.00
|
%
|
|||||||||||||||
Pankaj
Sharma
|
72,456
|
0.02
|
%
|
-
|
72,456
|
0.00
|
%
|
|||||||||||||||
Kim
DeWitt
|
42,215
|
0.01
|
%
|
-
|
42,215
|
0.00
|
%
|
|||||||||||||||
Robert
Doggett
|
351,133
|
0.08
|
%
|
-
|
351,133
|
0.00
|
%
|
|||||||||||||||
Dr.
Bhagwab Swaroop Misra
|
7,319
|
0.00
|
%
|
-
|
7,319
|
0.00
|
%
|
|||||||||||||||
Subtotal
|
1,846,733
|
0.43
|
%
|
-
|
1,846,733
|
(4)
|
|
0.00
|
%
|
|||||||||||||
Cornell
Capital Partners, L.P.
|
22,445,000
|
4.99
|
%
|
40,216,667
|
62,661,667
|
(5)
|
|
0.00
|
%
|
|||||||||||||
-
|
||||||||||||||||||||||
Airlie
Master Opportunity Fund, Ltd.
|
1,866,666
|
0.43
|
%
|
-
|
1,866,666
|
0.00
|
%
|
|||||||||||||||
Richard
Berritt
|
1,866,667
|
0.43
|
%
|
-
|
1,866,667
|
0.00
|
%
|
|||||||||||||||
Jonathan
Heine
|
1,866,667
|
0.43
|
%
|
-
|
1,866,667
|
0.00
|
%
|
|||||||||||||||
Subtotal
|
5,600,000
|
1.28
|
%
|
-
|
5,600,000
|
(6)
|
|
0.00
|
%
|
|||||||||||||
ABLECO
Finance, LLC
|
456,250
|
0.11
|
%
|
-
|
456,250
|
(7)
|
|
0.00
|
%
|
|||||||||||||
ARK-CLO
2000-1
|
447,303
|
0.10
|
%
|
-
|
447,303
|
(8)
|
|
0.00
|
%
|
|||||||||||||
Avenue
Special Situations Fund II, LP
|
118,386
|
0.03
|
%
|
-
|
118,386
|
(9)
|
|
0.00
|
%
|
|||||||||||||
BNP
Paribas
|
208,727
|
0.05
|
%
|
-
|
208,727
|
(10)
|
|
0.00
|
%
|
|||||||||||||
Cerberus
Partners, L.P.
|
1,884,475
|
0.43
|
%
|
-
|
1,884,475
|
(11)
|
|
0.00
|
%
|
|||||||||||||
Foothill
Partners III, L.P.
|
684,375
|
0.16
|
%
|
-
|
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
|
0.05
|
%
|
-
|
208,727
|
(14)
|
|
0.00
|
%
|
|||||||||||||
US
Bank, N.A.
|
208,727
|
0.05
|
%
|
-
|
208,727
|
(15)
|
|
0.00
|
%
|
|||||||||||||
Wells
Fargo Foothill, Inc.
|
684,375
|
0.16
|
%
|
-
|
684,375
|
(16)
|
|
0.00
|
%
|
|||||||||||||
Subtotal
|
5,000,000
|
1.14
|
%
|
-
|
5,000,000
|
(17)
|
|
0.00
|
%
|
|||||||||||||
Peter
Aquino
|
3,728
|
0.00
|
%
|
-
|
300
|
0.00
|
%
|
|||||||||||||||
Alexander
Enterprise Holdings
|
1,260,939
|
0.29
|
%
|
-
|
101,455
|
0.27
|
%
|
|||||||||||||||
Daniel
P. Behuniak
|
252,188
|
0.06
|
%
|
-
|
20,291
|
0.05
|
%
|
|||||||||||||||
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
|
0.04
|
%
|
-
|
55,800
|
0.03
|
%
|
|||||||||||||||
Drax
Holdings LP
|
1,260,939
|
0.29
|
%
|
-
|
101,455
|
0.27
|
%
|
|||||||||||||||
Chris
Drazdys
|
114,199
|
0.03
|
%
|
-
|
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
|
0.02
|
%
|
-
|
6,087
|
0.02
|
%
|
|||||||||||||||
Mohinder
Goswami
|
252,188
|
0.06
|
%
|
-
|
20,291
|
0.05
|
%
|
|||||||||||||||
Mary
Guerra
|
121,050
|
0.03
|
%
|
-
|
9,740
|
0.03
|
%
|
|||||||||||||||
Peter
Habib
|
52,959
|
0.01
|
%
|
-
|
4,261
|
0.01
|
%
|
|||||||||||||||
Raja
B. Hannush
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.01
|
%
|
|||||||||||||||
Health
Care Professionals, Inc.
|
1,513,124
|
0.35
|
%
|
121,746
|
0.32
|
%
|
||||||||||||||||
David
Hoachman
|
113,484
|
0.03
|
%
|
-
|
9,131
|
0.02
|
%
|
|||||||||||||||
Jimayne
Howser
|
7,439
|
0.00
|
%
|
-
|
599
|
0.00
|
%
|
|||||||||||||||
Lawrence
R. Hyman
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.01
|
%
|
|||||||||||||||
Lawrence
R. and Lois Hyman as TBE
|
302,625
|
0.07
|
%
|
-
|
24,349
|
0.06
|
%
|
|||||||||||||||
Ammar
Kawash
|
151,260
|
0.03
|
%
|
-
|
12,170
|
0.03
|
%
|
|||||||||||||||
Timothy
Keating
|
110,603
|
0.03
|
%
|
-
|
8,899
|
0.02
|
%
|
|||||||||||||||
Allen
H. Kupetz
|
25,218
|
0.01
|
%
|
-
|
2,029
|
0.01
|
%
|
|||||||||||||||
Frank
Frost Lane
|
68,091
|
0.02
|
%
|
-
|
5,479
|
0.01
|
%
|
|||||||||||||||
JoAnn
Lanning
|
7,418
|
0.00
|
%
|
-
|
597
|
0.00
|
%
|
|||||||||||||||
Paul
Latchford
|
222,914
|
0.05
|
%
|
-
|
17,936
|
0.05
|
%
|
|||||||||||||||
Jerry
and Michelle Levine as TBE
|
151,313
|
0.04
|
%
|
-
|
12,175
|
0.03
|
%
|
|||||||||||||||
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
|
0.59
|
%
|
-
|
205,910
|
0.54
|
%
|
|||||||||||||||
Thomas
Mazerski
|
2,047,344
|
0.47
|
%
|
-
|
164,729
|
(18)
|
|
0.44
|
%
|
|||||||||||||
Robert
William McCausland
|
504,376
|
0.12
|
%
|
-
|
40,582
|
0.11
|
%
|
|||||||||||||||
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
|
0.03
|
%
|
-
|
8,505
|
0.03
|
%
|
|||||||||||||||
Mark
Norris
|
151,313
|
0.04
|
%
|
-
|
12,175
|
(34)
|
|
0.03
|
%
|
|||||||||||||
Richard
O’Connell
|
1,270,260
|
0.29
|
%
|
-
|
102,205
|
0.27
|
%
|
|||||||||||||||
Jennifer
Orem
|
932
|
0.00
|
%
|
-
|
75
|
0.00
|
%
|
|||||||||||||||
John
C. Payne
|
933,093
|
0.22
|
%
|
-
|
75,076
|
0.20
|
%
|
|||||||||||||||
Jamie
Pollock
|
3,464
|
0.00
|
%
|
-
|
279
|
0.00
|
%
|
|||||||||||||||
Richard
Ramlall
|
324,560
|
0.08
|
%
|
-
|
26,114
|
0.07
|
%
|
|||||||||||||||
Cynthia
A. Ryan
|
189,140
|
0.04
|
%
|
-
|
15,218
|
0.04
|
%
|
|||||||||||||||
Frederick
Sass
|
25,218
|
0.01
|
%
|
-
|
2,029
|
0.01
|
%
|
|||||||||||||||
Joseph
P. Schmelzeis
|
31,523
|
0.01
|
%
|
-
|
2,536
|
0.01
|
%
|
|||||||||||||||
Fredrik
C. Schreuder
|
252,186
|
0.06
|
%
|
-
|
20,291
|
0.05
|
%
|
|||||||||||||||
Stephen
Schwartz
|
63,048
|
0.01
|
%
|
-
|
5,073
|
0.01
|
%
|
|||||||||||||||
Shah,
Vipul
|
63,046
|
0.01
|
%
|
-
|
5,073
|
0.01
|
%
|
|||||||||||||||
Spencer
Segura
|
453,937
|
0.11
|
%
|
-
|
36,524
|
0.10
|
%
|
|||||||||||||||
Spencer
Trask Illumination Fund
|
635,512
|
0.15
|
%
|
-
|
51,133
|
(37)
|
|
0.14
|
%
|
|||||||||||||
Spencer
Trask Media & Communication Group, LLC
|
7,565,618
|
1.75
|
%
|
-
|
608,728
|
(37)
|
|
1.61
|
%
|
Melissa
Stoneberg
|
3,700
|
0.00
|
%
|
-
|
298
|
0.00
|
%
|
|||||||||||||||
Stacey
Swoboda
|
3,728
|
0.00
|
%
|
-
|
300
|
0.00
|
%
|
|||||||||||||||
Paul
Taylor
|
136,093
|
0.03
|
%
|
-
|
10,145
|
0.03
|
%
|
|||||||||||||||
Luca
Toscani
|
36,214
|
0.01
|
%
|
-
|
2,914
|
0.01
|
%
|
|||||||||||||||
Michele
Toscani
|
12,862
|
0.00
|
%
|
-
|
1,035
|
0.00
|
%
|
|||||||||||||||
Greg
Van Allen
|
36,482
|
0.01
|
%
|
-
|
1,125
|
0.01
|
%
|
|||||||||||||||
John
Vandewalle
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.01
|
%
|
|||||||||||||||
Viventures
2 Entrepeneurs Fund LP
|
43,502
|
0.01
|
%
|
-
|
3,500
|
(38)
|
|
0.01
|
%
|
|||||||||||||
Viventures
2 FCPR
|
15,284,489
|
3.53
|
%
|
-
|
1,229,782
|
(38)
|
|
3.24
|
%
|
|||||||||||||
Nancy
Walcutt
|
3,939
|
0.00
|
%
|
-
|
317
|
0.00
|
%
|
|||||||||||||||
Subtotal
|
39,612,408
|
9.10
|
%
|
-
|
3,223,625
|
(19)
|
|
8.36
|
%
|
|||||||||||||
Martin
Levetin
|
150,000
|
0.03
|
%
|
450,000
|
(36)
|
|
600,000
|
(20)
|
|
0.00
|
%
|
|||||||||||
Geoffrey
B. Amend (21)
|
1,318,839
|
0.30
|
%
|
2,181,161
|
3,500,000
|
(21)
|
|
0.00
|
%
|
|||||||||||||
Larry
Bouts (22)
|
800,000
|
0.18
|
%
|
-
|
800,000
|
(22)
|
|
0.00
|
%
|
|||||||||||||
Dr.
Bruce Bowman (22)
|
260,000
|
0.06
|
%
|
-
|
250,000
|
(22)
|
|
0.00
|
%
|
|||||||||||||
Hank
Deily (23)
|
-
|
0.00
|
%
|
750,000
|
750,000
|
(23)
|
|
0.00
|
%
|
|||||||||||||
John
Dumbleton (24)
|
2,000,000
|
0.46
|
%
|
-
|
2,000,000
|
(24)
|
|
0.00
|
%
|
|||||||||||||
Kurt
Gordon (25)
|
7,718,750
|
1.75
|
%
|
281,250
|
1,500,000
|
(25)
|
|
1.44
|
%
|
|||||||||||||
Don
Gunther (22)
|
839,500
|
0.19
|
%
|
-
|
800,000
|
(22)
|
|
0.01
|
%
|
|||||||||||||
Hawk
Associates, Inc. (26)
|
200,000
|
0.05
|
%
|
-
|
200,000
|
(26)
|
|
0.00
|
%
|
|||||||||||||
John
von Harz (27)
|
800,000
|
0.18
|
%
|
-
|
800,000
|
(27)
|
|
0.00
|
%
|
|||||||||||||
Kevin
Kuykendall (28)
|
3,538,950
|
0.81
|
%
|
-
|
3,500,000
|
(22)
|
|
0.01
|
%
|
|||||||||||||
Michael
Kleeman (22)
|
192,500
|
0.04
|
%
|
62,500
|
250,000
|
(22)
|
|
0.00
|
%
|
|||||||||||||
Chris
MacFarland (29)
|
1,008,334
|
0.23
|
%
|
41,666
|
1,050,000
|
(29)
|
|
0.00
|
%
|
|||||||||||||
Tammy
Martin (30)
|
1,363,636
|
0.31
|
%
|
136,364
|
1,500,000
|
(30)
|
|
0.00
|
%
|
|||||||||||||
Tom
Mazerski (35)
|
1,000,000
|
0.23
|
%
|
1,000,000
|
2,000,000
|
(35)
|
|
0.00
|
%
|
|||||||||||||
Michael
O’Neil (29)
|
1,008,334
|
0.23
|
%
|
41,666
|
1,050,000
|
(29)
|
|
0.00
|
%
|
|||||||||||||
Ocean
Avenue Advisors (31)
|
2,000,000
|
0.46
|
%
|
-
|
2,000,000
|
(31)
|
|
0.00
|
%
|
|||||||||||||
Philip
Otto (22)
|
250,000
|
0.06
|
%
|
-
|
250,000
|
(22)
|
|
0.00
|
%
|
|||||||||||||
Bruce
Sanguinetti (32)
|
4,000,000
|
0.92
|
%
|
-
|
3,000,000
|
(32)
|
|
0.23
|
%
|
|||||||||||||
Paul
Silverman (22)
|
1,000,000
|
0.23
|
%
|
-
|
1,000,000
|
(22)
|
|
0.00
|
%
|
|||||||||||||
Don
Sledge (29)
|
708,334
|
0.16
|
%
|
41,666
|
750,000
|
(29)
|
|
0.00
|
%
|
|||||||||||||
Fred
Tarter (22)
|
1,000,000
|
0.23
|
%
|
-
|
1,000,000
|
(22)
|
|
0.00
|
%
|
|||||||||||||
Jay
O. Wright (33)
|
16,268,651
|
3.63
|
%
|
4,084,849
|
5,000,000
|
(33)
|
|
3.27
|
%
|
|||||||||||||
47,275,828
|
9.87
|
%
|
8,621,122
|
(36)
|
|
32,950,000
|
4.56
|
%
|
||||||||||||||
Grand
Totals
|
134,129,969
|
26.27
|
%
|
49,287,789
|
124,082,025
|
10.48
|
%
|
(1)
|
The
percentage of outstanding shares is based on 432,161,236 shares
of common
stock outstanding on December 31, 2005, 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 December 31, 2005 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 principal amount of $271,131.85, plus
accrued
interest, in the amount of $10,221.30, and the settlement of
a second
note, in the principal 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, carried 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, carried 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 1,846,733 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, carried 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 $15.5 million debenture convertible into 51,666,667
shares
of our common stock (see Note 3 to the Condensed Consolidated
Financial
Statements as of September 30, 2005 included elsewhere in this
Prospectus)
and a warrant to purchase 6,000,000 shares of our common stock,
both dated
May 13, 2005, and provides equity financing to us through the
$100 million
Standby Equity Distribution Agreement. In connection with the
negotiation
of the SEDA, Cornell Capital received 7,990,000 shares of our
common stock
on June 7, 2005, 4,995,000 of which are being registered herein.
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.
|
(6)
|
Includes
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 Cameron and Seth Cameron maintains investment
and
voting control of the Airlie Fund.
|
(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)
|
Includes
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.
|
(18)
|
Thomas
Mazerski, a founder and the President and CEO of CloseCall
prior to our
acquisition, currently serves as Chief Executive Officer of
Close
Call.
|
(19)
|
Includes
warrants to purchase 3,500,000 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.
|
(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.
|
(21)
|
Includes
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 General Counsel
and corporate
Secretary, on November 1, 2004 and April 20, 2005,
respectively.
|
(22)
|
Includes
warrants to purchase common stock issued to each member of
our board of
advisors as follows - Messrs. Silverman and Tarter were each
issued a
warrant to purchase 1,000,000 shares of our common stock on
January 1,
2004 and July 20, 2004, respectively; Messrs. Bouts and Gunther
were each
issued a warrant to purchase 800,000 shares of our common stock
on January
1, 2004 and June 28, 2004, respectively; Dr. Bowman and Mr.
Otto were each
issued a warrant to purchase 250,000 shares of our common stock
on
February 17, 2005; and Mr. Kleeman was issued a warrant to
purchase
250,000 shares of our common stock on May 17, 2005.
|
(23)
|
Includes
a warrant to purchase 750,000 shares of our common stock awarded
to Hank
Deily, who currently serves as our Corporate Controller, on
June 20,
2005.
|
(24)
|
Includes
a warrant to purchase 2,000,000 shares of our common stock
awarded to John
Dumbleton, who until his employment with us ended January
15, 2006, served
as our Executive Vice President, Sales and Business Development,
on
January 17, 2005.
|
(25)
|
Includes
a warrant to purchase 1,500,000 shares of our common stock
awarded to Kurt
Gordon, who currently serves as our Chief Financial Officer,
on April 1,
2005.
|
(26)
|
Includes
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.
|
(27)
|
Includes
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.
|
(28)
|
Includes
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.
|
(29)
|
Includes
warrants to purchase common stock issued to each outside member
of our
Board of Directors as follows - Mr. O'Neil was issued warrants
to purchase
800,000 shares of our common stock on January 1, 2004 and warrants
to
purchase 250,000 shares of our common stock on June 16, 2005;
Mr.
MacFarland was issued warrants to purchase 800,000 shares of
our common
stock on March 1, 2004 and warrants to purchase 250,000 shares
of our
common stock on June 16, 2005; and Mr. Sledge was issued warrants
to
purchase 500,000 shares of our common stock on January 19,
2005 and
warrants to purchase 250,000 shares of our common stock on
June 15,
2005.
|
(30)
|
Includes
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.
|
(31)
|
Includes
shares issuable upon the exercise of a warrant to purchase
our common
stock that was granted in July 2004 connection with the provision
of
investor relations services.
|
(32)
|
Includes
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.
|
(33)
|
Includes
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
President and
Chief Executive Officer; Mr. Wright also serves as Chairman
of our Board
of Directors.
|
(34)
|
Mark
Norris currently serves as Chief Financial Officer of our voice
business
segment on a temporary basis.
|
(35)
|
Includes
options to purchase 500,000 shares of our common stock and
warrants to
purchase 1,500,000 shares of our common stock that were awarded
to Mr.
Mazursky on October 18, 2004 and April 20, 2005,
respectively.
|
(36)
|
Includes
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 December 31, 2005. Consequently, these shares are
not considered
beneficially owned by the holder of the stock warrant or option
on
December 31, 2005.
|
(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. |
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 operation is
concentrating its efforts on the deployment of municipally sponsored
wireless access zones. This segment also includes the operations
of our
51%-owned subsidiary, 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”) 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.
|
|
Internet
Services
|
Our
internet services segment is led by DFW Internet Services, Inc. (“DFW”,
doing business as Nationwide Internet), an Internet services provider
based in Irving, Texas, and its acquired Internet service provider
subsidiaries. Our Internet services segment provides broadband and
dial-up
Internet access, web-hosting services and related Internet services
to
business and residential customers in over 40 states.
|
|
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 |
|
Six
Months
Ended
September 30, 2005 |
|||||||||
Business
Segment
|
$s
|
%
of Revenues
|
$s
|
%
of Revenues
|
|||||||||
Voice
|
$
|
32,009,084
|
68.8
|
%
|
$
|
37,796,032
|
77.1
|
%
|
|||||
Internet
Services
|
13,884,060
|
29.9
|
7,861,019
|
16.0
|
|||||||||
Wireless
Networks
|
-
|
-
|
3,395,444
|
6.9
|
|||||||||
Corporate
|
615,000
|
1.3
|
-
|
-
|
|||||||||
Total
Revenues
|
$
|
46,508,144
|
100.0
|
%
|
$
|
49,052,495
|
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.
|
Corporate
|
6
full-time
employees and 1
consultant
|
|
Technology
|
56
full-time
employees and 8
consultants
|
|
Voice
Services
|
135
full-time
employees and 4
consultant
|
|
Internet
Services
|
107
full-time
employees and 1
consultant
|
|
|
Three
Months Ended
September 30, |
|
Six
Months Ended
September 30, |
|||||||||
Business
Segment
|
2004
|
2005
|
2004
|
2005
|
|||||||||
Voice
|
$
|
955,571
|
$
|
19,333,581
|
$
|
955,571
|
$
|
37,796,032
|
|||||
Internet
Services
|
3,547,498
|
3,823,619
|
4,567,662
|
7,861,019
|
|||||||||
Wireless
Networks
|
-
|
3,389,450
|
-
|
3,395,444
|
|||||||||
Corporate
|
465,000
|
-
|
615,000
|
-
|
|||||||||
Total
Revenues
|
$
|
4,968,069
|
$
|
26,546,650
|
$
|
6,138,233
|
$
|
49,052,495
|
For
the Three Months Ended June 30,
|
For
the Three Months Ended September 30,
|
|||||||||
2005
|
2004
|
2005
|
||||||||
Net
Income (Loss)
|
$
|
419,192
|
$
|
(1,747,761
|
)
|
$
|
523,900
|
|||
Add
non-EBITDA items included in net results:
|
||||||||||
Depreciation
and amortization
|
822,377
|
384,218
|
1,047,319
|
|||||||
Interest
expense, net
|
932,175
|
97,251
|
698,335
|
|||||||
EBITDA
|
$
|
2,173,744
|
$
|
(1,266,292
|
)
|
$
|
2,269,554
|
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
|
$
|
24,900,000
|
||
Less
-- SEDA draws converted to common stock
|
(21,950,000
|
)
|
||
Notes
payable under the SEDA
|
2,950,000
|
|||
Other
notes payable to Cornell Capital
|
4,100,000
|
|||
Outstanding
amounts available for conversion
|
7,050,000
|
|||
Accrued
interest
|
210,757
|
|||
Total
amounts available for conversion
|
$
|
7,260,757
|
||
Total
number of shares of common stock registered for the SEDA
|
250,000,000
|
|||
Less
-- Number of shares of common stock issued upon the conversion of
draws
($21,950,000) and interest ($531,666)
|
(108,075,663
|
)
|
||
Less
-- Number of shares of common stock issuable upon the conversion
of
outstanding amounts ($7,050,000) and accrued interest ($210,757)
based on
the closing stock price of $0.214 per share on November 4,
2005
|
(34,621,194
|
)
|
||
Total
number of shares of common stock available for the conversion of
future
draws and borrowings
|
107,303,143
|
|||
Funds
available under the SEDA based on the number of shares of common
stock
available (107,303,143 shares) and a price per share of
$0.214
|
$
|
22,503,615
|
Name
|
|
Age
|
|
Position
|
|
Jay
O. Wright
|
|
35
|
|
President,
Chief Executive Officer and Chairman of the Board
|
|
Kurt
Gordon
|
|
39
|
|
Chief
Financial Officer
|
|
Geoffrey
B. Amend
|
|
37
|
|
General
Counsel and Secretary
|
|
Jack
W. Beech
|
|
34
|
|
Vice
President, Technology, and Director
|
|
Tom
Mazerski
|
|
52
|
|
Chief
Executive Officer, CloseCall America, Inc.
|
|
Tammy
L. Martin
|
|
41
|
|
Chief
Executive Officer, President and General Counsel of Davel Communications,
Inc.
|
|
James L. Magruder, Jr. | 60 | Executive Vice President | |||
Doug Bethell | 56 | President, American Fiber Network, Inc. | |||
Chris
MacFarland
|
|
33
|
|
Director
|
|
Michael
G. O’Neil
|
|
62
|
|
Director
|
|
Don
Sledge
|
|
65
|
|
Director
|
Director
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating
and
Governance
Committee
|
|
Chris
MacFarland
|
|
X
|
|
X
|
|
Chair
|
|
Michael
O’Neil
|
|
Chair
|
|
X
|
|
X
|
|
Don
Sledge
|
|
X
|
|
Chair
|
|
X
|
Summary
Compensation Table
|
|
Annual
Compensation
|
Long
Term Compensation
|
||||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary
|
Paid
Bonus
|
Deferred
Bonus
|
Total
Bonus
|
Securities
Underlying
Options
|
All
Other
Compensation
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Jay
O. Wright
|
2005
|
$
|
179,000
|
$
|
317,150
|
$
|
649,062
|
$
|
966,212
|
15,182,500
|
--
|
|||||||||||
President
and Chief
|
2004
|
$
|
45,500
|
$
|
17,990
|
--
|
$
|
17,990
|
--
|
--
|
||||||||||||
Executive
Officer
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Kurt
Gordon
|
2005
|
$
|
174,000
|
$
|
297,150
|
$
|
649,062
|
$
|
946,212
|
--
|
--
|
|||||||||||
Chief
Financial Officer
|
2004
|
$
|
13,000
|
$
|
10,000
|
--
|
$
|
10,000
|
6,500,000
|
--
|
||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Jack
W. Beech
|
2005
|
$
|
145,360
|
$
|
25,708
|
$
|
99,292
|
$
|
125,000
|
--
|
--
|
|||||||||||
President,
DFW Internet
|
2004
|
$
|
36,340
|
$
|
125,000
|
--
|
$
|
125,000
|
--
|
--
|
||||||||||||
Services,
Inc.
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Geoffrey
B. Amend
|
2005
|
$
|
56,250
|
--
|
--
|
--
|
2,000,000
|
--
|
||||||||||||||
General
Counsel
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Tom
Mazerski
|
2005
|
$
|
83,077
|
--
|
--
|
--
|
500,000
|
--
|
||||||||||||||
Chief
Executive Officer,
|
|
|
|
|
|
|
|
|||||||||||||||
Close
Call America, Inc.
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Tammy
Martin
|
2005
|
$
|
68,069
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||
Chief
Executive Officer,
|
|
|
|
|
|
|
|
|||||||||||||||
Davel
Communications, Inc.
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
Bruce
Sanguinetti
|
2005
|
$
|
45,000
|
--
|
--
|
--
|
3,000,000
|
--
|
||||||||||||||
Chief
Executive Officer and
|
|
|
|
|
|
|
|
|||||||||||||||
President,
NeoReach, Inc.
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||
John
Dumbleton
|
2005
|
$
|
37,500
|
--
|
--
|
--
|
2,000,000
|
--
|
||||||||||||||
Executive
Vice President,
|
|
|
|
|
|
|
|
|||||||||||||||
Sales
and Business Development
|
|
|
|
|
|
|
|
Name
|
|
Number
of
Securities
Underlying
Options/SARs
Granted
(1)
|
|
Percent
of Total
Options/SARs
Granted
to
Employees
In
Fiscal
Year
|
|
Exercise
of
Base
Price
($/Sh)
|
|
Expiration
Date
|
|
Jay
O. Wright
|
|
15,182,500
|
|
53.6%
|
|
$0.018
|
|
4/15/14
|
|
Kurt
Gordon
|
|
--
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Jack
W. Beech
|
|
--
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Geoffrey
Amend
|
|
2,000,000
|
|
7.1%
|
|
$0.200
|
|
11/01/14
|
|
Tom
Mazerski
|
|
500,000
|
|
1.8%
|
|
$0.225
|
|
10/18/14
|
|
Tammy
Martin
|
|
--
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Bruce
Sanguinetti
|
|
3,000,000
|
|
10.6%
|
|
$0.160
|
|
1/01/15
|
|
John
Dumbleton
|
|
2,000,000
|
|
7.1%
|
|
$0.170
|
|
1/17/15
|
Name
|
|
Number
of
Shares
Acquired
on
Exercise
|
|
Value
Realized
|
|
Number
of Securities
Underlying
Unexercised
Options
at
March
31, 2005
Exercisable/Unexercisable
|
|
Value
of Unexercised
In-the-Money
Options at
March
31, 2005 (1)
Exercisable/Unexercisable
|
|
Jay
O. Wright
|
|
--
|
|
$0
|
|
11,282,500
/ 3,900,000
|
|
$1,714,940
/ $592,800
|
|
Kurt
Gordon
|
|
--
|
|
$0
|
|
4,781,250
/ 1,718,750
|
|
$726,750
/ $261,250
|
|
Jack
W. Beech
|
|
--
|
|
$0
|
|
--
|
|
$
0
/ $0
|
|
Geoffrey
B. Amend
|
|
--
|
|
$0
|
|
333,333
/ 1,666,667
|
|
$
0
/ $0
|
|
Tom
Mazerski
|
|
--
|
|
$0
|
|
52,083
/ 447,917
|
|
$
0
/ $0
|
|
Tammy
Martin
|
|
--
|
|
$0
|
|
--
|
|
$
0
/ $0
|
|
Bruce
Sanguinetti
|
|
--
|
|
$0
|
|
750,000
/ 2,250,000
|
|
$7,500
/ $22,500
|
|
John
Dumbleton
|
|
--
|
|
$0
|
|
666,666
/ 1,333,334
|
|
$
0
/ $0
|
(1)
|
The
value of unexercised in-the-money options at fiscal year end is calculated
using the last sale price of $0.17 per share as of March 31, 2005,
the
last trading day of fiscal year 2005 as reported on the OTC Bulletin
Board, less the applicable exercise price.
|
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and
rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column (a))
|
|||
|
(a)
|
(b)
|
(c)
|
|||
Equity
compensation plans approved by security holders (1)
|
150,000
|
$0.250
|
53,963
|
|||
Equity
compensation plans not approved by security holders (2)
|
62,807,500
|
$0.119
|
N/A
|
|||
Totals
|
62,957,500
|
$0.119
|
N/A
|
(1)
|
A
total of 1,000,000 shares were reserved for issuance under Mobilepro’s
2001 Equity Performance Plan at March 31, 2005. Available shares
may be
issued as stock options, restricted stock or stock bonuses. In September
2005, the stockholders approved an increase in the number of shares
available for issuance under the Plan to 30,000,000.
|
|
(2)
|
Includes
options to purchase 1,575,000 shares and warrants to purchase 61,232,500
shares that were issued by Mobilepro under non-plan options and warrants.
|
|
|
Shares
|
|
|||||||
|
|
Beneficially
|
Percent
|
|||||||
Name
and Address
|
Title
of Class
|
Owned
(1)
|
of
Class (1)
|
|||||||
Cornell
Capital Partners, L.P. (2)
|
Common
|
22,445,000
|
4.99
|
%
|
||||||
Daniel
Lozinsky (3)
|
Common
|
23,143,122
|
5.29
|
%
|
||||||
Jay
O. Wright (4)
|
Common
|
16,268,651
|
3.63
|
%
|
||||||
Kurt
Gordon (5)
|
Common
|
7,718,750
|
1.75
|
%
|
||||||
Geoffrey
B. Amend (5)
|
Common
|
1,318,839
|
*
|
|||||||
Jack
W. Beech
|
Common
|
9,380,863
|
2.17
|
%
|
||||||
Tom
Mazerski (6)
|
Common
|
3,048,459
|
*
|
|||||||
Tammy
Martin (5)
|
Common
|
1,363,636
|
*
|
|||||||
Bruce
Sanguinetti (5)
|
Common
|
4,000,000
|
*
|
|||||||
John
Dumbleton (5)
|
Common
|
2,000,000
|
*
|
|||||||
Chris
MacFarland (5)
|
Common
|
745,833
|
*
|
|||||||
Michael
G. O’ Neil (7)
|
Common
|
|
1,047,333
|
*
|
||||||
Don
Sledge (5)
|
Common
|
|
645,833
|
*
|
||||||
Officers
and Directors as a Group
(13
Persons) (8)
|
Common
|
58,538,197
|
12.48
|
%
|
*
|
Less
than 1%.
|
(1)
|
Applicable
percentage of ownership is based on 432,161,236 shares of common
stock
outstanding as of December 31, 2005, together with applicable options
and
warrants for each shareholder. Beneficial ownership is determined
in
accordance with the rules of the Securities and Exchange Commission
and
generally includes voting or investment power with respect to securities.
Shares of common stock subject to options and warrants that are
currently
exercisable or exercisable within 60 days of December 31, 2005
are deemed
to be beneficially owned by the person holding such options for
the
purpose of computing the percentage of ownership of such person,
but are
not treated as outstanding for the purpose of computing the percentage
ownership of any other person.
|
(2)
|
Includes
4,995,000 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 (11,450,000 shares) of our
common stock issuable upon the conversion of the $15.5 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
171,000 shares of our common stock and 16,097,651 shares of common
stock
issuable upon the exercise of warrants to purchase our common
stock.
|
(5)
|
Includes
shares of common stock issuable upon the exercise of warrants to
purchase
our common stock.
|
(6)
|
Includes
1,883,391 shares of our common stock, 998,402 shares of common
stock
issuable upon the exercise of warrants to purchase our common stock,
and
166,666 shares of common stock issuable upon the exercise of options
to
purchase our common stock.
|
(7)
|
Includes
101,500 shares of our common stock and 945,833 shares of our common
stock issuable upon the exercise of warrants to purchase shares
of our
common stock.
|
(8)
|
Includes
21,536,754 shares of our common stock, 36,834,777 shares of common
stock issuable upon the exercise of warrants to purchase our
common stock,
and 166,666 shares of common stock issuable upon the exercise
of options
to purchase our common stock.
|
|
Bid
Price Per Share
|
|||
|
High
|
|
Low
|
|
2003
|
|
|
|
|
April
1, 2003 - June 30, 2003
|
$0.04
|
|
$0.01
|
|
July
1, 2003 - September 30, 2003
|
$0.07
|
|
$0.01
|
|
October
1, 2003 - December 31, 2003
|
$0.04
|
|
$0.02
|
|
2004
|
|
|
|
|
January
1, 2004 - March 31, 2004
|
$0.13
|
|
$0.02
|
|
April
1, 2004 - June 30, 2004
|
$0.28
|
|
$0.10
|
|
July
1, 2004 - September 30, 2004
|
$0.27
|
|
$0.14
|
|
October
1, 2004 - December 31, 2004
|
$0.24
|
|
$0.15
|
|
2005
|
|
|
|
|
January
1, 2005 - March 31, 2005
|
$0.24
|
|
$0.17
|
|
April
1, 2005 - June 30, 2005
|
$0.38
|
|
$0.15
|
|
July
1, 2005 - September 30, 2005
|
$0.36
|
|
$0.24
|
|
October
1, 2005 - December 31, 2005
|
$0.26
|
$0.17
|
||
2006
|
||||
January
1, 2006 - January 17, 2006
|
$0.22
|
$0.18
|
|
Page(s)
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2005 and
September 30, 2005
|
F-2,
F-3
|
|
Condensed
Consolidated Statements of Operations for the Three Months and
Six Months
Ended September 30, 2004 and 2005
|
F-4
|
|
Condensed
Consolidated Statements of Cash Flows for the Six
Months Ended September 30, 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-54
|
March
31,
|
September
30,
|
||||||
2005
|
2005
|
||||||
(audited)
|
(unaudited)
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,669,787
|
$
|
7,860,528
|
|||
Restricted
cash
|
429,954
|
337,200
|
|||||
Accounts
receivable, net
|
12,658,313
|
13,325,598
|
|||||
Prepaid
expenses and other current assets
|
2,511,697
|
2,887,045
|
|||||
Total
Current Assets
|
20,269,751
|
24,410,371
|
|||||
FIXED
ASSETS, NET OF ACCUMULATED DEPRECIATION
|
13,193,056
|
13,690,178
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill,
net of impairment
|
32,579,099
|
37,492,479
|
|||||
Customer
contracts and relationships, net of amortization
|
2,965,456
|
8,954,928
|
|||||
Other
intangible assets, net of amortization
|
1,511,005
|
572,415
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
586,667
|
|||||
Other
assets
|
1,277,897
|
1,453,780
|
|||||
39,360,124
|
49,060,269
|
||||||
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
87,160,818
|
March
31,
|
September
30,
|
||||||
2005
|
2005
|
||||||
(audited)
|
(unaudited)
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of convertible debenture
|
$
|
-
|
$
|
3,000,000
|
|||
Notes
payable under the Standby Equity Distribution Agreement ( the
"SEDA")
|
6,500,000
|
2,950,000
|
|||||
Current
portion of other notes payable
|
19,035,263
|
4,466,124
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
18,063,184
|
|||||
Liability
for common stock to be issued
|
-
|
422,513
|
|||||
Deferred
revenue
|
3,470,731
|
3,910,217
|
|||||
|
|||||||
Total
Current Liabilities
|
48,869,082
|
32,812,038
|
|||||
|
|||||||
LONG-TERM
LIABILITIES
|
|||||||
Convertible
debenture, net of unamortized debt discount of $701,775
and
|
|||||||
current
portion
|
-
|
11,798,225
|
|||||
Notes
payable and other long-term liabilities, net of current
maturities
|
999,196
|
821,725
|
|||||
Total
Long-Term Liabilities
|
999,196
|
12,619,950
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
45,431,988
|
|||||
MINORITY
INTERESTS
|
600,000
|
3,817,708
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock, $.001 par value, 20,035,425 shares authorized
|
|||||||
and
35,378 shares issued and outstanding at March 31, 2005
|
|||||||
and
September 30, 2005
|
35
|
35
|
|||||
Common
stock, $.001 par value, 1,500,000,000 shares authorized
|
|||||||
and
355,918,011 and 405,656,705 shares issued and outstanding
|
|||||||
at
March 31, 2005 and September 30, 2005
|
355,918
|
405,657
|
|||||
Additional
paid-in capital
|
43,195,250
|
57,758,888
|
|||||
Additional
paid-in capital, beneficial conversion feature
|
- | 1,395,000 | |||||
Additional
paid-in capital, stock warrant
|
- | 853,200 | |||||
Accumulated
deficit, beginning of period
|
(15,836,828
|
)
|
(21,196,550
|
)
|
|||
Net
income (loss) for the period
|
(5,359,722
|
)
|
943,092
|
||||
Total
Stockholders' Equity
|
22,354,653
|
37,911,122
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
72,822,931
|
$
|
87,160,818
|
|||
For
the Three Months Ended
|
For
the Six Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2004
|
2005
|
2004
|
2005
|
||||||||||
REVENUES
|
$
|
4,968,069
|
$
|
26,546,650
|
$
|
6,138,233
|
$
|
49,052,495
|
|||||
OPERATING
COSTS AND EXPENSES
|
|||||||||||||
Cost
of services (exclusive of depreciation and amortization)
|
2,167,373
|
11,654,395
|
2,525,312
|
22,676,257
|
|||||||||
Payroll,
professional fees and related expenses
|
3,615,240
|
5,520,895
|
4,525,291
|
9,199,547
|
|||||||||
Advertising
and marketing expenses
|
111,259
|
799,193
|
166,637
|
1,317,857
|
|||||||||
Office
rent and expenses
|
125,121
|
462,879
|
152,530
|
892,820
|
|||||||||
Other
general and administrative expenses
|
215,368
|
5,697,025
|
449,784
|
10,380,007
|
|||||||||
Depreciation
and amortization
|
384,218
|
1,047,319
|
497,495
|
1,869,696
|
|||||||||
Total
Operating Costs and Expenses
|
6,618,579
|
25,181,706
|
8,317,049
|
46,336,184
|
|||||||||
OPERATING
INCOME (LOSS)
|
(1,650,510
|
)
|
1,364,944
|
(2,178,816
|
)
|
2,716,311
|
|||||||
INTEREST
EXPENSE, NET
|
(97,251
|
)
|
(698,335
|
)
|
(326,384
|
)
|
(1,630,510
|
)
|
|||||
MINORITY
INTERESTS IN NET (INCOME)/LOSS OF
|
|||||||||||||
CONSOLIDATED
SUBSIDIARIES
|
-
|
(142,709
|
)
|
-
|
(142,709
|
)
|
|||||||
NET
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
|
(1,747,761
|
)
|
523,900
|
(2,505,200
|
)
|
943,092
|
|||||||
Provision
for Income Taxes
|
-
|
-
|
-
|
-
|
|||||||||
NET
INCOME (LOSS) APPLICABLE TO COMMON SHARES
|
$
|
(1,747,761
|
)
|
$
|
523,900
|
$
|
(2,505,200
|
)
|
$
|
943,092
|
|||
NET
INCOME (LOSS) PER SHARE
|
|||||||||||||
Basic
|
$
|
(0.0067
|
)
|
$
|
0.0014
|
$
|
(0.0102
|
)
|
$
|
0.0025
|
|||
Diluted
|
$
|
(0.0067
|
)
|
$
|
0.0012
|
$
|
(0.0102
|
)
|
$
|
0.0023
|
|||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||||||||
SHARES
OUTSTANDING
|
260,374,993
|
388,001,055
|
246,403,262
|
374,464,022
|
|||||||||
For
the Six Months Ended
|
|||||||
September
30,
|
|||||||
2004
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
income (loss)
|
$
|
(2,505,200
|
)
|
$
|
943,092
|
||
Adjustments
to reconcile net income (loss) to net cash
|
|||||||
provided
by (used in) operating activities:
|
|||||||
Depreciation
and amortization
|
497,495
|
1,869,686
|
|||||
Noncash
interest expense
|
285,129
|
352,597
|
|||||
Minority
interests
|
-
|
142,709
|
|||||
Investments
received for services
|
(450,000
|
)
|
-
|
||||
Other
|
15,000
|
38,032
|
|||||
Changes
in assets and liabilities
|
|||||||
(Increase)
in accounts receivable
|
(490,467
|
)
|
(639,113
|
)
|
|||
(Increase)
decrease in other current assets
|
(110,210
|
)
|
435,625
|
||||
(Increase)
in other assets
|
(45,194
|
)
|
(687,992
|
)
|
|||
Increase
(decrease) in accounts payable and
|
|||||||
and
accrued expenses
|
695,452
|
(2,230,804
|
)
|
||||
Increase
in deferred revenue
|
638,223
|
439,486
|
|||||
Total
adjustments
|
1,035,428
|
(279,774
|
)
|
||||
Net
cash provided by (used in) operating activities
|
(1,469,772
|
)
|
663,318
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Acquisition
of intangible assets
|
-
|
(6,778,129
|
)
|
||||
Cash
paid for acquisitions
|
(11,535,500
|
)
|
(2,773,122
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
443,516
|
748,476
|
|||||
Capital
expenditures, net
|
(77,995
|
)
|
(1,641,539
|
)
|
|||
Net
cash (used in) investing activities
|
(11,169,979
|
)
|
(10,444,314
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Borrowings
under convertible debenture
|
-
|
15,500,000
|
|||||
Repayment
of acquisition bridge loan
|
-
|
(13,000,000
|
)
|
||||
Borrowings
under the equity line of credit and the SEDA
|
9,000,000
|
4,200,000
|
|||||
Investment
by minority interests
|
-
|
3,675,000
|
|||||
Borrowings/(payments)
under other notes payable, net
|
10,458,740
|
3,744,341
|
|||||
Debt
financing fees
|
-
|
(1,295,000
|
)
|
||||
SEDA
conversion fees
|
-
|
(375,500
|
)
|
||||
Increase
in other long-term liabilities
|
-
|
522,896
|
|||||
Proceeds
from common stock issuances
|
84,499
|
-
|
|||||
Net
cash provided by financing activities
|
|
19,543,239
|
|
12,971,737
|
|||
For
the Six Months Ended
|
|||||||
September
30,
|
|||||||
2004
|
2005
|
||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
$
|
6,903,488
|
$
|
3,190,741
|
|||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
1,955,607
|
4,669,787
|
|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
8,859,095
|
$
|
7,860,528
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Cash
paid during the period for interest
|
$
|
28,757
|
$
|
1,034,928
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Conversion
of notes payable and accrued interest to common stock
|
$
|
5,200,000
|
$
|
13,808,841
|
|||
Acquisition
of Evergreen Broadband
|
$
|
-
|
$
|
231,073
|
|||
Acquisition
of WazAlliance
|
$
|
-
|
$
|
135,333
|
|||
Conversion
of payables to common stock
|
$
|
90,000
|
$
|
-
|
|||
Debt
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
-
|
|||
Beneficial
conversion feature
|
$
|
-
|
$
|
1,395,000 | |||
Value
of stock warrant
|
$ |
-
|
|
$
|
853,200 | ||
Transfer
of notes payable to the SEDA
|
$
|
-
|
$
|
7,200,000
|
|||
Goodwill
recorded in acquisitions
|
$
|
16,063,690
|
$
|
2,277,840
|
|||
Liability
for common stock to be issued
|
$
|
500,000
|
$
|
422,513
|
|||
Amortization
of SEDA deferred financing fees
|
$
|
-
|
$
|
440,000
|
|||
Adjustment
to minority interest
|
$
|
-
|
$
|
150,000
|
|||
Note
payable in escrow
|
$
|
75,000
|
$
|
-
|
|||
For
the Six Months Ended
September 30, |
|||||||
2004
|
2005
|
||||||
Net
income (loss), as reported
|
$
|
(2,505,200
|
)
|
$
|
943,092
|
||
Add:
Stock-based employee compensation expense included in reported
net income
(loss)
|
-
|
-
|
|||||
Deduct:
Total stock-based employee compensation expense determined
under fair
value based method for all awards
|
(6,004,019
|
)
|
(1,900,247
|
)
|
|||
|
|
|
|||||
Pro
forma net loss
|
$
|
(8,509,219
|
)
|
$
|
(957,155
|
)
|
|
|
|
|
|||||
Net
income (loss) per share:
|
|
|
|||||
Diluted,
as reported
|
$
|
(0.0102
|
)
|
$
|
0.0023
|
||
|
|
|
|||||
Diluted,
pro forma
|
$
|
(0.0345
|
)
|
$
|
(0.0026
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004
|
|
|
2005
|
|
||
Dividend
yield
|
None
|
None
|
||||||
Expected
volatility
|
|
|
60
|
%
|
|
|
60
|
%
|
Risk-free
interest rate
|
|
|
4.50
|
%
|
|
|
3.00
|
%
|
Expected
term (in years)
|
|
|
10.00
|
|
|
|
10.00
|
|
Estimated
Useful
Lives
(in years)
|
March
31, 2005
|
September
30,
2005
|
||||||||
(audited)
|
(unaudited)
|
|||||||||
Furniture
and fixtures
|
7
|
$
|
387,861
|
$
|
422,177
|
|||||
Machinery
and equipment
|
5
|
13,584,088
|
15,745,595
|
|||||||
Leasehold
improvements
|
7
|
263,452
|
343,077
|
|||||||
Vehicles
|
5
|
287,733
|
208,417
|
|||||||
Subtotals
|
14,523,134
|
16,719,266
|
||||||||
Less
accumulated depreciation
|
(
1,330,078
|
)
|
(
3,029,088
|
)
|
||||||
Fixed
assets, net
|
$
|
13,193,056
|
$
|
13,690,178
|
March
31,
|
September
30,
|
||||||
2005
|
2005
|
||||||
(audited)
|
(unaudited)
|
||||||
Accounts
payable
|
$
|
16,911,370
|
$
|
12,449,588
|
|||
Accrued
compensation
|
1,675,124
|
1,416,110
|
|||||
Accrued
interest expense
|
937,378
|
671,641
|
|||||
Other
accrued liabilities
|
339,216
|
3,525,845
|
|||||
Totals
|
$
|
19,863,088
|
$
|
18,063,184
|
|
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
||||||||||
2004
|
2005
|
2004
|
2005
|
||||||||||
Revenues
|
$
|
6,678,415
|
$
|
26,546,650
|
$
|
9,601,372
|
$
|
50,615,263
|
|||||
Net
income (loss)
|
(1,606,759
|
)
|
523,900
|
(2,320,027
|
)
|
1,053,263
|
|||||||
Net
income (loss) per share:
|
|||||||||||||
Basic
|
(0.0059
|
)
|
0.0014
|
(0.0090
|
)
|
0.0028
|
|||||||
Diluted
|
(0.0059
|
)
|
0.0012
|
(0.0090
|
)
|
0.0025
|
Convertible
debenture payable to Cornell Capital
|
$
|
15,500,000
|
||
Notes
payable to Cornell Capital under the SEDA
|
2,950,000
|
|||
Notes
payable to Cornell Capital
|
4,100,000
|
|||
Notes
payable related to acquisitions
|
156,410
|
|||
Other
notes payable and long-term obligations
|
1,031,440
|
|||
23,737,850
|
||||
Less:
Unamortized debt discount on convertible debenture
|
(701,775
|
)
|
||
Less:
Amounts due within one year
|
(10,416,125
|
)
|
||
Long-term
portion of debt
|
$
|
12,619,950
|
The
twelve-month period ending --
|
||||
September
30, 2007
|
$
|
6,489,462
|
||
September
30, 2008
|
6,810,274
|
|||
September
30, 2009
|
21,989
|
|||
September
30, 2010
|
-
|
|||
13,321,725
|
||||
Less
- Unamortized debt discount on convertible debenture
|
(701,775
|
)
|
||
Long-term
portion of debt
|
$
|
12,619,950
|
Number
of
|
Weighted-Average
|
||||||
Stock
Options --
|
Options
|
Exercise
Price
|
|||||
|
|||||||
Outstanding
- March 31, 2005
|
1,725,000
|
$
|
0.192
|
||||
Granted
|
2,000,000
|
$
|
0.270
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
-
|
$
|
-
|
||||
Outstanding
- September 30, 2005
|
3,725,000
|
$
|
0.234
|
||||
Exercisable
- September 30, 2005
|
985,416
|
$
|
0.174
|
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
|
-
|
$
|
-
|
||||
Outstanding
- September 30, 2005
|
80,832,500
|
$
|
0.159
|
||||
Exercisable
- September 30, 2005
|
63,281,313
|
$
|
0.160
|
Three
Months Ended September 30, 2005
|
Six
Months Ended September 30, 2005
|
||||||
Net
income
|
$
|
523,900
|
$
|
943,092
|
|||
Weighted
average number of shares outstanding during the period
|
388,001,055
|
374,464,022
|
|||||
Add:
the treasury stock effect of stock options and warrants
|
41,914,293
|
40,930,727
|
|||||
Add:
the effect of the assumed conversion of SEDA notes payable
to common
stock
|
8,216,171
|
-
|
|||||
|
|
||||||
Diluted
number of shares outstanding
|
438,131,519
|
415,394,749
|
|||||
Net
income per share:
|
|
||||||
Basic
|
$
|
0.0014
|
$
|
0.0025
|
|||
Diluted
|
$
|
0.0012
|
$
|
0.0023
|
The
Three Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
September 30, 2004
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
955,571
|
$
|
3,547,498
|
$
|
-
|
$
|
465,000
|
$
|
4,968,069
|
||||||
Cost
of revenues (exclusive of depreciation and amortization)
|
(466,235
|
)
|
(1,701,138
|
)
|
-
|
-
|
(2,167,373
|
)
|
||||||||
Other
operating expenses
|
(365,883
|
)
|
(1,363,825
|
)
|
(255,091
|
)
|
(2,082,189
|
)
|
(4,066,988
|
)
|
||||||
Depreciation
and amortization
|
(27,920
|
)
|
(132,651
|
)
|
(7,294
|
)
|
(216,353
|
)
|
(384,218
|
)
|
||||||
Interest,
net
|
-
|
(29,356
|
)
|
-
|
(67,895
|
)
|
(97,251
|
)
|
||||||||
Net
income (loss)
|
$
|
95,533
|
$
|
320,528
|
$
|
(262,385
|
)
|
$
|
(1,901,437
|
)
|
$
|
(1,747,761
|
)
|
|||
Total
assets
|
$
|
4,278,743
|
$
|
17,967,490
|
$
|
18,986
|
$
|
12,410,455
|
$
|
34,675,674
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
71,140
|
$
|
1,290,511
|
$
|
14,587
|
$
|
-
|
$
|
1,376,238
|
||||||
Goodwill,
net of impairment
|
$
|
3,057,405
|
$
|
13,818,288
|
$
|
-
|
$
|
-
|
$
|
16,875,693
|
The
Three Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
September 30, 2005
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
19,333,581
|
$
|
3,823,619
|
$
|
3,389,450
|
$
|
-
|
$
|
26,546,650
|
||||||
Cost
of revenues (exclusive of depreciation and amortization)
|
(8,197,761
|
)
|
(1,782,707
|
)
|
(1,673,927
|
)
|
-
|
(11,654,395
|
)
|
|||||||
Other
operating expenses
|
(8,290,359
|
)
|
(1,683,449
|
)
|
(1,926,127
|
)
|
(580,057
|
)
|
(12,479,992
|
)
|
||||||
Depreciation
and amortization
|
(775,316
|
)
|
(85,129
|
)
|
(183,228
|
)
|
(3,646
|
)
|
(1,047,319
|
)
|
||||||
Interest,
net
|
(7,491
|
)
|
4,849
|
9,128
|
(704,821
|
)
|
(698,335
|
)
|
||||||||
Minority
interests
|
35,645
|
-
|
(178,354
|
)
|
-
|
(142,709
|
)
|
|||||||||
Net
income (loss)
|
$
|
2,098,299
|
$
|
277,183
|
$
|
(563,058
|
)
|
$
|
(1,288,524
|
)
|
$
|
523,900
|
||||
Total
assets
|
$
|
55,190,207
|
$
|
17,897,818
|
$
|
10,712,861
|
$
|
3,359,932
|
$
|
87,160,818
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,740,439
|
$
|
1,277,848
|
$
|
668,216
|
$
|
3,675
|
$
|
13,690,178
|
||||||
Goodwill,
net of impairment
|
$
|
21,925,741
|
$
|
15,072,519
|
$
|
494,219
|
$
|
-
|
$
|
37,492,479
|
The
Six Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
September 30, 2004
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
955,571
|
$
|
4,567,662
|
$
|
-
|
$
|
615,000
|
$
|
6,138,233
|
||||||
Cost
of revenues (exclusive of depreciation and amortization)
|
(466,235
|
)
|
(2,059,077
|
)
|
-
|
-
|
(2,525,312
|
)
|
||||||||
Other
operating expenses
|
(365,883
|
)
|
(1,788,139
|
)
|
(778,711
|
)
|
(2,361,509
|
)
|
(5,294,242
|
)
|
||||||
Depreciation
and amortization
|
(27,920
|
)
|
(168,948
|
)
|
(7,294
|
)
|
(293,333
|
)
|
(497,495
|
)
|
||||||
Interest,
net
|
-
|
(41,255
|
)
|
-
|
(285,129
|
)
|
(326,384
|
)
|
||||||||
Net
income (loss)
|
$
|
95,533
|
$
|
510,243
|
$
|
(786,005
|
)
|
$
|
(2,324,971
|
)
|
$
|
(2,505,200
|
)
|
|||
The
Six Month Period
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
Ended
September 30, 2005
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
37,796,032
|
$
|
7,861,019
|
$
|
3,395,444
|
$
|
-
|
$
|
49,052,495
|
||||||
Cost
of revenues (exclusive of depreciation and amortization)
|
(17,251,793
|
)
|
(3,738,731
|
)
|
(1,685,733
|
)
|
-
|
(22,676,257
|
)
|
|||||||
Other
operating expenses
|
(15,231,270
|
)
|
(3,436,254
|
)
|
(2,154,076
|
)
|
(968,631
|
)
|
(21,790,231
|
)
|
||||||
Depreciation
and amortization
|
(1,511,859
|
)
|
(166,928
|
)
|
(183,616
|
)
|
(7,293
|
)
|
(1,869,696
|
)
|
||||||
Interest,
net
|
(8,040
|
)
|
(13,616
|
)
|
9,202
|
(1,618,056
|
)
|
(1,630,510
|
)
|
|||||||
Minority
interests
|
35,645
|
-
|
(178,354
|
)
|
-
|
(142,709
|
)
|
|||||||||
Net
income (loss)
|
$
|
3,828,715
|
$
|
505,490
|
$
|
(797,133
|
)
|
$
|
(2,593,980
|
)
|
$
|
943,092
|
||||
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 under the Standby Equity Distribution Agreement
|
6,500,000
|
-
|
|||||
Notes
payable under the Equity Line of Credit
|
-
|
1,800,000
|
|||||
Deferred
revenue
|
3,470,731
|
58,202
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
589,819
|
|||||
Total
Current Liabilities
|
48,869,082
|
2,511,654
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Long-term
debt and notes payable, net of current maturities
|
999,196
|
560,200
|
|||||
Total
Long-Term Liabilities
|
999,196
|
560,200
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
3,071,854
|
|||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|||||||
Preferred
stock, $.001 par value, 5,035,425 shares authorized
|
|||||||
and
35,378 shares issued and outstanding at March 31, 2005 and
2004
|
35
|
35
|
|||||
Common
stock, $.001 par value, 600,000,000 shares
authorized
|
|||||||
and
355,918,011 and 220,493,159 shares issued and outstanding
|
|||||||
at
March 31, 2005 and 2004
|
355,918
|
220,493
|
|||||
Additional
paid-in capital
|
43,195,250
|
15,902,619
|
|||||
Accumulated
deficit
|
(21,196,550
|
)
|
(15,836,828
|
)
|
|||
Minority
interest
|
600,000
|
-
|
|||||
Total
Stockholders' Equity (Deficit)
|
22,954,653
|
286,319
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
72,822,931
|
$
|
3,358,173
|
|
2005
|
2004
|
|||||
|
|
|
|||||
REVENUES
|
$
|
46,508,144
|
$
|
311,355
|
|||
|
|
|
|||||
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
|
3,155,408
|
|
(647,536
|
)
|
|||
Total
adjustments
|
6,013,291
|
|
(188,666
|
)
|
|||
Net
cash provided by (used in) operating activities
|
653,569
|
|
(2,346,510
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Cash
paid for acquisitions
|
(32,960,500
|
)
|
(350,000
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
5,827,223
|
47,756
|
|||||
Acquisition
of intangible assets
|
(1,192,608
|
)
|
-
|
|
|||
Capital
expenditures, net
|
(2,109,338
|
)
|
(999
|
)
|
|||
Net
cash (used in) investing activities
|
(30,435,223
|
)
|
(303,243
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from common stock issuances
|
84,499
|
-
|
|||||
Borrowings
under the equity line of credit, the standby equity
|
|||||||
distribution
agreement and other convertible debentures
|
17,700,000
|
4,785,000
|
|||||
Payments
of other convertible debentures
|
-
|
|
(50,000
|
)
|
|||
Change
in convertible debentures - officers, net
|
-
|
|
(97,617 |
)
|
|||
Proceeds
(payments) of long-term debt, net
|
14,711,335 |
|
(38,738
|
)
|
|||
Net
cash provided by financing activities
|
32,495,834
|
4,598,645
|
2005
|
2004
|
||||||
NET
INCREASE IN
|
|||||||
CASH
AND CASH EQUIVALENTS
|
2,714,180
|
1,948,892
|
|||||
CASH
AND CASH EQUIVALENTS -
|
|||||||
BEGINNING
OF YEAR
|
1,955,607
|
6,715
|
|||||
CASH
AND CASH EQUIVALENTS - END OF YEAR
|
$
|
4,669,787
|
$
|
1,955,607
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|||||||
INFORMATION:
|
|||||||
Cash
paid during the year for interest
|
$
|
533,050
|
$
|
-
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH
|
|||||||
ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Conversion
of notes payable to common stock
|
$
|
13,000,000
|
$
|
3,145,000
|
|||
Conversion
of other convertible debentures
|
$
|
-
|
$
|
206,585
|
|||
Conversion
of advances and payables to common stock
|
$
|
-
|
$
|
563,616
|
|||
Deferred
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
-
|
|||
Acquisition
of DFW Internet Services, Inc.
|
$
|
-
|
$
|
500,000
|
|||
Liability
for common stock to be issued
|
$
|
300,000
|
$
|
-
|
|||
Assignment
of bridge debentures receivable
|
$
|
1,000,000
|
$
|
-
|
|||
Goodwill
recorded in acquisitions
|
$
|
32,785,618
|
$
|
525,185
|
March 31,
2005
|
|
March
31, 2004
|
|||||
Net
loss
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
Weighted-average
common shares
|
|||||||
outstanding
(Basic)
|
289,933,904
|
111,591,658
|
|||||
|
|||||||
Weighted-average
common stock
|
|||||||
equivalents
--
|
|||||||
Stock
options
|
-
|
-
|
|||||
Warrants
|
-
|
-
|
|||||
Weighted-average
common shares
|
|||||||
outstanding
(Diluted)
|
289,933,904
|
111,591,658
|
|||||
Net
loss per share, basic and diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
2005
|
2004
|
|||||
|
|||||||
Accounts
payable
|
$
|
17,250,586
|
$
|
499,819
|
|||
|
|||||||
Accrued
compensation
|
1,675,124
|
90,000
|
|||||
|
|||||||
Accrued
interest expense
|
937,378
|
-
|
|||||
|
|||||||
Total
|
$
|
19,863,088
|
$
|
589,819
|
Estimated
Useful
Lives
(Years)
|
2005
|
|
2004
|
|||||||
Furniture
and fixtures
|
7
|
$
|
387,861
|
$
|
9,379
|
|||||
Machinery
and equipment
|
5
|
13,584,088
|
371,437
|
|||||||
Leasehold
improvements
|
7
|
263,452
|
2,141
|
|||||||
Vehicles
|
5
|
287,733
|
77,296
|
|||||||
Total
|
14,523,134
|
460,253
|
||||||||
Less
accumulated depreciation
|
1,330,078
|
323,755
|
||||||||
Property
and equipment, net
|
$
|
13,193,056
|
$
|
136,498
|
Note
payable to bank at $3,032 per month, including interest at
prime plus 1%
(6.75%) and maturing March 2006; secured by assets of World
Trade Network,
Inc.
|
$
36,964
|
|
Note
payable to a bank for a vehicle in the amount of $1,000 per
month,
including interest at 5.875%, secured by the CloseCall America,
Inc.
acquired vehicle.
|
37,745
|
|
Note
payable to a bank for expansion in the amount of $4,317 per
month,
including interest at 4.25%, secured by the CloseCall America,
Inc.
company’s corporate vehicle.
|
102,839
|
|
Note
payable to a company at $6,988 per month, including interest
at 7.50%;
secured by assets of the acquired company.
|
13,241
|
|
Note
payable to an individual at $1,473 per month, including interest
at 7.50%;
secured by assets of the acquired company.
|
12,872
|
|
203,661
|
||
Less:
Current maturities
|
(121,464
|
)
|
Long-term
bank debt
|
$
82,197
|
Years
Ending
March
31,
|
||||
2006
|
$
|
121,464
|
||
2007
|
60,203
|
|||
2008
|
15,245
|
|||
2009
|
6,749
|
|||
$
|
203,661
|
Years
Ended March 31,
|
||||
2006
|
$
|
11,754
|
||
2007
|
53,465
|
|||
Total
|
$
|
65,219
|
||
Computer
and mailing equipment
|
$
|
43,812
|
||
Less
- accumulated amortization
|
|
(10,728
|
)
|
|
$
|
33,084
|
Years
Ending
March
31,
|
Capital
Leases
|
Operating
Leases
|
|||||
2006
|
$
|
10,508
|
$
|
593,515
|
|||
2007
|
10,508
|
338,518
|
|||||
2008
|
4,068
|
245,344
|
|||||
2009
|
-
|
65,470
|
|||||
2010
|
-
|
55,354
|
|||||
Total
minimum lease payments
|
25,084
|
$
|
1,298,201
|
||||
Less
- amounts representing interest
|
(4,215
|
)
|
|||||
Less
- current portion
|
(5,354
|
)
|
|||||
Long-term
capital lease obligation
|
$
|
15,515
|
Weighted-Average
|
|||||||
Number
of Options |
Exercise
Price
|
||||||
|
|||||||
Outstanding
- beginning of period
|
4,171,037
|
$
|
.0482
|
||||
Granted
|
5,225,000
|
.1748
|
|||||
Exercised
|
(446,037
|
)
|
.0594
|
||||
Cancelled
|
(7,225,000
|
)
|
.1047
|
||||
Outstanding
- end of period
|
1,725,000
|
.1920
|
|||||
Exercisable
- end of period
|
722,917
|
$
|
.1635
|
Weighted-Average
|
|||||||
Number
of Options |
Exercise
Price
|
||||||
|
|||||||
Outstanding
- beginning of period
|
521,037
|
$
|
.123
|
||||
Granted
|
4,000,000
|
.036
|
|||||
Exercised
|
(350,000
|
)
|
.02
|
||||
Cancelled
|
-
|
-
|
|||||
Outstanding
- end of period
|
4,171,037
|
.0482
|
|||||
Exercisable
- end of period
|
2,454,787
|
$
|
.0458
|
2005
|
2004
|
||||||
|
|||||||
Net
loss as reported
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
|
Total
stock-based employee compensation expense determined under
fair value
based method for all awards, net of related tax effects
|
(1,652,185
|
)
|
(156,889
|
)
|
|||
Pro
forma net loss
|
$
|
(7,011,907
|
)
|
$
|
(2,314,733
|
)
|
|
Net
loss per share:
|
|||||||
As
reported:
|
|||||||
Basic
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
Diluted
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
|
Pro
forma:
|
|||||||
Basic
|
$
|
(0.024
|
)
|
$
|
(0.02
|
)
|
|
Diluted
|
$
|
(0.024
|
)
|
$
|
(0.02
|
)
|
Exercise
Price
|
Expiration
Date
|
2005
|
2004
|
|||||||
$.30
|
|
|
October,
2009
|
|
|
2,500,000
|
|
|
-
|
|
$.35
|
|
|
October,
2009
|
|
|
1,000,000
|
|
|
-
|
|
$.30
|
|
|
November,
2009
|
|
|
5,000,000
|
|
|
-
|
|
$.15
|
|
|
February,
2010
|
|
|
200,000
|
|
|
-
|
|
$.20
|
|
|
November,
2011
|
|
|
5,600,000
|
|
|
-
|
|
$.032
|
|
|
September,
2013
|
|
|
-
|
|
|
500,000
|
|
$.018
|
|
|
January,
2014
|
|
|
6,500,000
|
|
|
6,500,000
|
|
$.02
|
|
|
January,
2014
|
|
|
3,400,000
|
|
|
-
|
|
$.10
|
|
|
March,
2014
|
|
|
800,000
|
|
|
-
|
|
$.018
|
|
|
April,
2014
|
|
|
21,182,500
|
|
|
-
|
|
$.20
|
|
|
June,
2014
|
|
|
4,300,000
|
|
|
-
|
|
$.18
|
|
|
July,
2014
|
|
|
2,000,000
|
|
|
-
|
|
$.20
|
|
|
July,
2014
|
|
|
1,000,000
|
|
|
-
|
|
$.20
|
|
|
November,
2014
|
|
|
2,000,000
|
|
|
-
|
|
$.16
|
|
|
January,
2015
|
|
|
3,000,000
|
|
|
-
|
|
$.17
|
|
|
January,
2015
|
|
|
2,000,000
|
|
|
-
|
|
$.185
|
|
|
January,
2015
|
|
|
500,000
|
|
|
-
|
|
$.193
|
|
|
February,
2015
|
|
|
250,000
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
61,232,500
|
|
|
7,000,000
|
|
Weighted
average exercise price
|
|
$
|
0.117
|
|
$
|
0.019
|
|
|
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
|
World | |||||||||||||||||||||||||||||||||||||
CloseCall
|
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
|
$
|
2,513,000
|
$
|
1,660,000
|
$
|
750,000
|
$
|
707,736
|
$
|
944,767
|
$
|
1,060,000
|
$
|
1,730,000
|
$
|
34,256,235
|
|||||||||||||
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
|
-
|
-
|
349,054
|
564,876
|
- | - | - |
33,986
|
1,140,461
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
Aggregate
purchase price amounts
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,659,749
|
$
|
1,200,000
|
$
|
3,513,000
|
$
|
2,309,054
|
$
|
1,564,876
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,763,986
|
$
|
49,463,932
|
|||||||||||||
Number
of Shares Issued
|
-
|
39,999,999
|
-
|
-
|
5,000,000
|
1,500,000
|
-
|
-
|
-
|
878,816
|
-
|
47,378,815
|
|||||||||||||||||||||||||
Allocation
of Acquisition Cost
|
|||||||||||||||||||||||||||||||||||||
Net
assets of acquired company
|
$
|
14,758,500
|
$
|
1,529,459
|
$
|
-
|
$
|
(109,986
|
)
|
$
|
1,439,838
|
$
|
-
|
$
|
-
|
$
|
63,058
|
$
|
294,144
|
$
|
229,297
|
$
|
-
|
$
|
18,204,310
|
||||||||||||
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
|
|||||||||||||||||||||||||
Aggregate
purchase price amounts
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,659,749
|
$
|
1,200,000
|
$
|
3,513,000
|
$
|
2,309,054
|
$
|
1,564,876
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,763,986
|
$
|
49,463,932
|
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
---------------------
124,082,025
Shares of Common Stock
MOBILEPRO
CORP.
January
__ , 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 | ||
21.1
|
Subsidiaries
of Registrant
|
Incorporated
by reference to Exhibit 21.1 to the Registrant’s Quarterly Report on Form
10-QSB filed August 15, 2005
|
||
23.1
|
Consent
of Bagell, Josephs & Company, L.L.C.
|
Provided
herewith
|
||
23.2
|
Consent
of Schiff Hardin LLP
|
Provided
herewith (see Exhibit 5.1)
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Jay O. Wright
|
|
President,
Chief Executive Officer,
|
|
January
23, 2006
|
|
Jay
O. Wright
|
|
Principal
Executive Officer and Director
|
|
|
|
|
|
|
|
|
|
/s/
Kurt Gordon
|
|
Chief
Financial Officer, Principal Financial and Principal Accounting
Officer
|
|
January
23, 2006
|
|
Kurt
Gordon
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Jack W. Beech
|
|
Director
|
|
January
23, 2006
|
|
Jack
W. Beech
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Chris MacFarland
|
|
Director
|
|
January
23, 2006
|
|
Chris
MacFarland
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Michael G. O’Neil
|
|
Director
|
|
January
23, 2006
|
|
Michael
G. O’Neil
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Don Sledge
|
|
Director
|
|
January
23, 2006
|
|
Don
Sledge
|
|
|
|
|