•
|
|
Cornell
Capital Partners, L.P., which intends to sell up to 2,995,000 acquired
pursuant to a Standby Equity Distribution Agreement with us and up
to an
additional 250,000,000 which may be acquired pursuant to that
agreement.
|
||
|
||||
•
|
|
Jay
O. Wright, our CEO, who intends to sell up to 15,182,500 shares underlying
warrants held by him, subject to compliance with the volume limitations
of
Rule 144 and a lock-up agreement which prohibits the sale of any
stock prior to November 15, 2004, and limits his sale of shares
thereafter to no more than 1 million shares per quarter. On June 9,
2004, Mr. Wright voluntarily agreed to extend the lockup of his equity
in
the company for 17 additional months, until the end of his employment
contract in April 2006.
|
||
|
||||
•
|
|
Kurt
Gordon, our CFO, who intends to sell up to 6,500,000 shares underlying
warrants held by him, subject to compliance with the volume limitations
of
Rule 144 and a lock-up agreement which prohibited the sale of any
stock prior to November 15, 2004, and limits his sale of shares
thereafter to no more than 1 million shares per
quarter.
|
||
|
||||
•
|
|
Paul
Silverman, Chairman of our Advisory Board, who intends to sell up
to
500,000 shares underlying warrants held by him.
|
||
|
||||
•
|
|
Arne
Dunhem, a former CEO of MobilePro, who intends to sell up to 2,000,000
shares underlying warrants held by him.
|
||
|
||||
•
|
|
Daniel
Lozinsky, a former Director of MobilePro, who intends to sell up
to
18,037,037 shares, which shares include underlying warrants held
by him,
subject to compliance with the volume limitations of Rule 144 and a
lock-up agreement which prohibited the sale of any stock prior to
October 1, 2004.
|
||
|
||||
•
|
|
Newbridge
Securities Corporation, which intends to sell up to 5,000 shares
acquired
pursuant to a Placement Agent Agreement.
|
Wireless
Networks
|
Our
broadband wireless network deployment efforts are being conducted
by our
wholly-owned subsidiary, NeoReach, Inc., (“NeoReach”), and its subsidiary,
NeoReach Wireless, Inc. (“NeoReach Wireless”). This segment also includes
the operations of Kite Broadband LLC, (“Kite”), a wireless broadband
Internet service provider located in Ridgeland,
Mississippi.
|
|
|
Voice
Services
|
Our
voice services segment is led by CloseCall America, Inc. (“CloseCall”), a
Competitive Local Exchange Carrier (“CLEC”, which is a term applied under
the Telecommunications Act of 1996 to new local telephone companies
intended to compete with the incumbent local telephone companies)
based in
Stevensville, Maryland; American Fiber Network, Inc. (“AFN”), a CLEC based
in Kansas City, Kansas; and Davel Communications, Inc. (“Davel”), an
independent payphone provider based in Cleveland, Ohio. CloseCall
offers
our customers a full array of telecommunications products and services
including local, long-distance, 1.800CloseCall anytime/anywhere calling,
digital wireless, high-speed telephone (voice over IP), and dial-up
and
DSL Internet services. AFN is licensed to provide local telephone,
long
distance and/or Internet services throughout the United States. Davel
is
one of the largest independent payphone operators in the United States,
providing approximately 57% of the revenues of the voice services
segment
in the nine months ended December 31, 2005.
|
|
|
Internet
Services
|
Our
internet services segment is led by DFW Internet Services, Inc. (“DFW”,
doing business as Nationwide Internet), an Internet services provider
(“ISP”) based in Irving, Texas, its acquired Internet service provider
subsidiaries and InReach Internet, L.L.C, (“InReach”), a full service ISP
located in Stockton, California that we acquired on November 1, 2005.
Our
Internet services segment provides dial-up and broadband Internet
access, web-hosting services and related Internet services to business
and
residential customers in over 40 states. Over 80% of our ISP customers
subscribe to our dial-up service.
|
|
|
Corporate
|
Our
corporate reporting segment serves as the holding company of the
operating
subsidiaries that are divided among the other three business reporting
segments, provides senior executive and financial management, and
performs
corporate-level accounting, financial reporting and legal functions.
Occasionally, its employees may provide services to customers resulting
in
the recognition of consulting service revenues.
|
|
|
Fiscal
Year Ended
March
31, 2005
|
|
Nine Months Ended
December
31, 2005
|
|
||||||||
Business
Segment
|
|
$s
|
|
%
of Revenues
|
|
$s
|
|
%
of Revenues
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Voice
|
|
$
|
32,009,084
|
|
|
68.8
|
%
|
$
|
56,301,164
|
|
|
74.8
|
%
|
Internet
Services
|
|
|
13,884,060
|
|
|
29.9
|
|
|
12,395,635
|
|
|
16.5
|
|
Wireless
Networks
|
|
|
—
|
|
|
—
|
|
|
6,600,302
|
|
|
8.7
|
|
Corporate
|
|
|
615,000
|
|
|
1.3
|
|
|
—
|
|
|
—
|
|
Total
Revenues
|
|
$
|
46,508,144
|
|
|
100.0
|
%
|
$
|
75,297,101
|
|
|
100.0
|
%
|
|
|
For
the
Year
Ended
March
31, 2004
|
|
For
the
Year
Ended
March
31, 2005
|
|
For
the Nine
Months
Ended
December
31, 2004
|
|
For
the Nine
Months
Ended
December
31, 2005
|
|
||||
Statement
of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
311,355
|
|
$
|
46,508,144
|
|
$
|
23,265,366
|
|
$
|
75,297,101
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating
Costs and Expenses
|
|
|
2,094,507
|
|
|
50,029,303
|
|
|
27,493,176
|
|
|
78,903,939
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating
Loss
|
|
|
(1,783,152
|
)
|
|
(3,521,159
|
)
|
|
(4,227,816
|
)
|
|
(3,606,838
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Other
Income (Expenses)
|
|
|
(374,692
|
)
|
|
(1,838,563
|
)
|
|
(1,232,280
|
)
|
|
(2,213,295
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Minority
Interests
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(192,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Loss Applicable to Common Shares
|
|
$
|
(2,157,844
|
)
|
$
|
(5,359,722
|
)
|
$
|
(5,460,090
|
)
|
$
|
(6,012,640
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Net
Loss Per Share
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted
|
|
$
|
(0.0193
|
)
|
$
|
(0.0185
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
|
|
March
31,
2004
|
|
March
31,
2005
|
|
December
31,
2005
|
|
|||
Balance
Sheet Data:
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||
Assets
|
|
|
|
|
|
|
|
|||
Cash
and Cash Equivalents
|
|
$
|
1,955,607
|
|
$
|
4,669,787
|
|
$
|
4,960,703
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
$
|
2,106,143
|
|
$
|
20,269,751
|
|
$
|
20,415,289
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Non-Current Assets
|
|
|
1,252,030
|
|
|
52,553,180
|
|
|
62,971,598
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
3,358,173
|
|
$
|
72,822,931
|
|
$
|
83,386,887
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
$
|
2,511,654
|
|
$
|
48,869,082
|
|
$
|
31,686,396
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Long-Term Liabilities
|
|
|
560,200
|
|
|
999,196
|
|
|
11,698,207
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
3,071,854
|
|
|
49,868,278
|
|
|
43,384,603
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority
Interests
|
|
|
—
|
|
|
600,000
|
|
|
3,799,605
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Stockholders’ Equity
|
|
|
286,319
|
|
|
22,354,653
|
|
|
36,202,679
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders’ Equity
|
|
$
|
3,358,173
|
|
$
|
72,822,931
|
|
$
|
83,386,887
|
|
•
|
|
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.
|
|
|
|
Three
Months Ended
December
31,
|
|
Nine
Months Ended
December
31,
|
|
||||||||
Business
Segment
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Voice
Services
|
|
$
|
12,391,227
|
|
$
|
18,505,132
|
|
$
|
13,346,798
|
|
$
|
56,301,164
|
|
Internet
Services
|
|
|
4,735,906
|
|
|
4,534,617
|
|
|
9,303,568
|
|
|
12,395,635
|
|
Wireless
Networks
|
|
|
-
|
|
|
3,204,857
|
|
|
-
|
|
|
6,600,302
|
|
Corporate
|
|
|
-
|
|
|
-
|
|
|
615,000
|
|
|
-
|
|
Total
Revenues
|
|
$
|
17,127,133
|
|
$
|
26,244,606
|
|
$
|
23,265,366
|
|
$
|
75,297,101
|
|
|
|
|
|
|
|
||||||||
|
|
Three
Months Ended
December
31,
|
|
Nine
Months Ended
December
31,
|
|
||||||||
Business
Segment
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Voice
Services
|
|
|
72.3
|
%
|
|
70.5
|
%
|
|
57.4
|
%
|
|
74.8
|
%
|
Internet
Services
|
|
|
27.7
|
|
|
17.3
|
|
|
40.0
|
|
|
16.5
|
|
Wireless
Networks
|
|
|
-
|
|
|
12.2
|
|
|
-
|
|
|
8.7
|
|
Corporate
|
|
|
-
|
|
|
|
|
|
2.6
|
|
|
|
|
Total
Revenues
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Acquired
Company
|
|
2004
|
|
2005
|
|
Increase
|
|
|||
|
|
|
|
|
|
|
|
|||
Davel
|
|
$
|
6,377,744
|
|
$
|
10,084,268
|
|
$
|
3,706,524
|
|
CloseCall
(includes Affinity and US1)
|
|
|
6,013,483
|
|
|
6,509,269
|
|
|
495,786
|
|
Kite
|
|
|
-
|
|
|
3,199,366
|
|
|
3,199,366
|
|
AFN
|
|
|
-
|
|
|
1,906,635
|
|
|
1,906,635
|
|
InReach
|
|
|
-
|
|
|
943,138
|
|
|
943,138
|
|
|
|
|
|
|
|
|
|
|||
Total
Revenues
|
|
$
|
12,391,227
|
|
$
|
22,642,676
|
|
$
|
10,251,449
|
|
|
|
For
the Three Months Ended September 30,
|
|
For
the Three Months
Ended
December
31,
|
|
For
the Nine Months
Ended
December 31,
|
|
||||||
|
|
2005
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Net
Income (Loss)
|
|
$
|
523,900
|
|
$
|
(6,955,732
|
)
|
$
|
(2,954,890
|
)
|
$
|
(6,012,640
|
)
|
Add
non-EBITDA items included in net results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization
|
|
|
1,047,319
|
|
|
1,293,993
|
|
|
792,717
|
|
|
3,163,689
|
|
Interest
expense, net
|
|
|
698,335
|
|
|
582,785
|
|
|
905,896
|
|
|
2,213,295
|
|
Goodwill
impairment and restructuring costs
|
|
|
-
|
|
|
5,100,041
|
|
|
-
|
|
|
5,100,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
2,269,554
|
|
$
|
21,087
|
|
$
|
(1,256,277
|
)
|
$
|
4,464,385
|
|
Acquired
Company
|
|
2004
|
|
2005
|
|
Increase
|
|
|||
|
|
|
|
|
|
|
|
|||
Davel
|
|
$
|
6,377,744
|
|
$
|
32,283,029
|
|
$
|
25,905,285
|
|
CloseCall
(includes Affinity and US1)
|
|
|
6,969,054
|
|
|
20,479,012
|
|
|
13,509,958
|
|
Kite
|
|
|
-
|
|
|
6,584,680
|
|
|
6,584,680
|
|
AFN
|
|
|
-
|
|
|
3,539,123
|
|
|
3,539,123
|
|
InReach
|
|
|
-
|
|
|
943,138
|
|
|
943,138
|
|
|
|
|
|
|
|
|
|
|||
Total
Revenues
|
|
$
|
13,346,798
|
|
$
|
63,828,982
|
|
$
|
50,482,184
|
|
|
|
For
the Fiscal Years
Ended
March
31,
|
|
||||
|
|
2005
|
|
2004
|
|
||
Net
Loss
|
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
Add
back non-EBIDTA items included in net loss:
|
|
|
|
|
|
||
Depreciation
and amortization
|
|
|
2,442,363
|
|
|
374,342
|
|
Interest,
net
|
|
|
1,574,502
|
|
|
21,350
|
|
|
|
|
|
|
|
||
EBITDA
|
|
$
|
(1,342,857
|
)
|
$
|
(1,762,152
|
)
|
SEDA
Activity and Availability
|
|
Amounts
|
|
|
|
|
|
|
|
Amounts
drawn under the SEDA to date (includes interest)
|
|
$
|
26,623,129
|
|
Less
-- SEDA draws and interest converted to common stock to
date
|
|
|
(26,623,129
|
)
|
|
|
|
|
|
Notes
payable under the SEDA at December 31, 2005
|
|
|
-
|
|
Other
notes payable to Cornell Capital at December 31, 2005
|
|
|
6,600,000
|
|
|
|
|
|
|
Outstanding
amount available for conversion
|
|
|
6,600,000
|
|
Accrued
interest at December 31, 2005
|
|
|
269,184
|
|
|
|
|
|
|
Total
amounts available for conversion
|
|
$
|
6,869,184
|
|
|
|
|
|
|
Total
number of shares of common stock registered for the SEDA
|
|
|
250,000,000
|
|
Less
-- Number of shares of common stock issued to date upon the conversion
of
draws and interest
|
|
|
(130,057,147
|
)
|
Less
-- Number of shares of common stock issuable upon the conversion
of
outstanding notes ($6,600,000) and accrued interest ($269,184) at
December
31, 2005 under
the SEDA based on the closing stock price of $0.23 per share on
February 3, 2006
|
|
|
(29,866,017
|
)
|
Total
number of shares of common stock available for the conversion of
future
draws and borrowings
|
|
|
90,076,836
|
|
Funds
available under the SEDA based on the number of shares of common
stock
available (90,076,836 shares) and a price per share of
$0.23
|
|
$
|
20,717,672
|
|
Wireless
Networks
|
Our
broadband wireless network deployment efforts are being conducted
by our
wholly-owned subsidiary, NeoReach, Inc., and its subsidiary, NeoReach
Wireless, Inc. This segment also includes the operations of Kite
Broadband, LLC, a wireless broadband Internet service provider located
in
Ridgeland, Mississippi.
|
Voice Services
|
Our
voice services segment is led by CloseCall America, Inc., a CLEC
based in
Stevensville, Maryland; American Fiber Network, Inc., a CLEC based
in
Kansas City, Kansas; and Davel Communications, Inc., an independent
payphone provider based in Cleveland, Ohio. CloseCall offers our
customers
a full array of telecommunications products and services including
local,
long-distance, 1.800CloseCall anytime/anywhere calling, digital wireless,
high-speed telephone (voice over IP), and dial-up and DSL Internet
services. AFN is licensed to provide local telephone, long distance
and/or
Internet services throughout the United States. Davel is one of the
largest independent payphone operators in the United States, providing
approximately 57% of the revenues of the voice services segment in
the
nine months ended December 31, 2005.
|
Internet Services
|
Our
internet services segment includes the operations of DFW Internet
Services, Inc., an ISP based in Irving, Texas, its acquired ISP
subsidiaries, and InReach Internet, L.L.C., a full service ISP located
in
Stockton, California that we acquired on November 1, 2005. Our Internet
services segment provides dial-up and broadband Internet access,
web-hosting services and related Internet services to business and
residential customers in over 40 states. Over 80% of our ISP customers
subscribe to our dial-up service.
|
Corporate
|
Our
corporate reporting segment serves as the holding company of the
operating
subsidiaries that are divided among the other three business reporting
segments, provides senior executive and financial management, and
performs
corporate-level accounting, financial reporting and legal functions.
Occasionally, its employees may provide services to customers resulting
in
the recognition of consulting service
revenues.
|
|
|
Three
Months Ended
December
31,
|
|
Nine
Months Ended
December
31,
|
|
||||||||
Business
Segment
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Voice
Services
|
|
$
|
12,391,227
|
|
$
|
18,505,132
|
|
$
|
13,346,798
|
|
$
|
56,301,164
|
|
Internet
Services
|
|
|
4,735,906
|
|
|
4,534,617
|
|
|
9,303,568
|
|
|
12,395,635
|
|
Wireless
Networks
|
|
|
-
|
|
|
3,204,857
|
|
|
-
|
|
|
6,600,302
|
|
Corporate
|
|
|
-
|
|
|
-
|
|
|
615,000
|
|
|
-
|
|
Total
Revenues
|
|
$
|
17,127,133
|
|
$
|
26,244,606
|
|
$
|
23,265,366
|
|
$
|
75,297,101
|
|
|
|
Three
Months Ended
December
31,
|
|
Nine
Months Ended
December
31,
|
|
||||||||
Business
Segment
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Voice
Services
|
|
|
72.3
|
%
|
|
70.5
|
%
|
|
57.4
|
%
|
|
74.8
|
%
|
Internet
Services
|
|
|
27.7
|
|
|
17.3
|
|
|
40.0
|
|
|
16.5
|
|
Wireless
Networks
|
|
|
-
|
|
|
12.2
|
|
|
-
|
|
|
8.7
|
|
Corporate
|
|
|
-
|
|
|
|
|
|
2.6
|
|
|
|
|
Total
Revenues
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
-
|
create
a standard regulatory scheme for all public payphone service
providers;
|
-
|
establish
a per call compensation plan to ensure that all payphone service
providers
are fairly compensated for each and every completed intrastate and
interstate call, except for 911 emergency and telecommunications
relay
service calls;
|
-
|
terminate
subsidies for LEC payphones from LEC regulated rate-base
operations;
|
-
|
prescribe,
at a minimum, nonstructural safeguards to eliminate discrimination
between
LECs and IPPs and remove the LEC payphones from the LEC’s regulated asset
base;
|
-
|
provide
for the RBOCs to have the same rights that IPPs have to negotiate
with
Location Owners over the selection of interLATA carrier services,
subject
to the FCC’s determination that the selection right is in the public
interest and subject to existing contracts between the Location Owners
and
interLATA carriers;
|
-
|
provide
for the right of all PSPs to choose the local, intraLATA and interLATA
carriers subject to the requirements of, and contractual rights negotiated
with, Location Owners and other valid state regulatory
requirements;
|
-
|
evaluate
the requirement for payphones which would not normally be installed
under
competitive conditions but which might be desirable as a matter of
public
policy, and establish how to provide for and maintain such payphones
if it
is determined they are required;
and
|
-
|
preempt
any state requirements which are inconsistent with the FCC’s regulations
implementing Section 276.
|
Corporate
|
6 full-time
employees
|
|
Wireless
Networks
|
64
full-time employees
|
|
Voice
Services
|
101
full-time employees
|
|
Internet
Services
|
131 full-time
employees
|
|
Name
|
|
Age
|
|
Position
|
Jay
O. Wright
|
|
36
|
|
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
|
|
63
|
|
Director
|
Don
Sledge
|
|
65
|
|
Director
|
Director
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating
and
Governance
Committee
|
Chris
MacFarland
|
|
X
|
|
X
|
|
Chair
|
Michael
O’Neil
|
|
Chair
|
|
X
|
|
X
|
Don
Sledge
|
|
X
|
|
Chair
|
|
X
|
Summary
Compensation Table
|
|
|
|
Annual
Compensation
|
|
Long
Term Compensation
|
|||||||||||||||||
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 $15.0 million debenture.
Under the terms of the debenture, Cornell Capital is required to
provide
65 days written notice in order to execute a conversion resulting
in
beneficial ownership greater than 4.99%.
|
|
(3)
|
Includes
18,143,122 shares of our common stock and 5,000,000 shares of common
stock
issuable upon the exercise of a warrant to purchase our common
stock.
|
|
(4)
|
Includes
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 - February 15, 2006
|
$0.30
|
|
$0.18
|
|
|
Page(s)
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2005 and December 31,
2005
|
F-2,
F-3
|
|
Condensed
Consolidated Statements of Operations for the Three Months and Nine
Months
Ended December 31, 2004 and 2005
|
F-4
|
|
Condensed
Consolidated Statements of Cash Flows for the Nine Months Ended December
31, 2004 and 2005
|
F-5,
F-6
|
|
Notes
to Condensed Consolidated Financial Statements
|
F-7
to F-21
|
|
|
|
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
F-22
|
|
Consolidated
Balance Sheets as of March 31, 2005 and 2004
|
F-23,
F-24
|
|
Consolidated
Statements of Operations for the Years Ended March 31, 2005 and 2004
|
F-25
|
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit) for the Years
Ended March 31, 2005 and 2004
|
F-26
|
|
Consolidated
Statements of Cash Flows for the Years Ended March 31, 2005 and
2004
|
F-27,
F-28
|
|
Notes
to Consolidated Financial Statements
|
F-29
to F-57
|
|
ASSETS
|
|||||||
|
|
|
|
|
|
||
|
|
March
31,
2005
|
|
December
31,
2005
|
|
||
|
|
(audited)
|
|
(unaudited)
|
|
||
|
|
|
|
|
|
||
CURRENT
ASSETS
|
|
|
|
|
|
||
Cash
and cash equivalents
|
|
$
|
4,669,787
|
|
$
|
4,960,703
|
|
Restricted
cash
|
|
|
429,954
|
|
|
337,200
|
|
Accounts
receivable, net
|
|
|
12,658,313
|
|
|
11,376,784
|
|
Prepaid
expenses and other current assets
|
|
|
2,511,697
|
|
|
3,740,602
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
20,269,751
|
|
|
20,415,289
|
|
|
|
|
|
|
|
|
|
FIXED
ASSETS, NET OF ACCUMULATED DEPRECIATION
|
|
|
13,193,056
|
|
|
14,286,154
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
Goodwill,
net of impairment
|
|
|
32,579,099
|
|
|
37,310,829
|
|
Customer
contracts and relationships, net of amortization
|
|
|
2,965,456
|
|
|
8,669,910
|
|
Other
intangible assets, net of amortization
|
|
|
1,511,005
|
|
|
423,259
|
|
Deferred
financing fees, net of amortization
|
|
|
1,026,667
|
|
|
366,667
|
|
Other
assets
|
|
|
1,277,897
|
|
|
1,914,779
|
|
|
|
|
|
|
|
|
|
|
|
|
39,360,124
|
|
|
48,685,444
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
72,822,931
|
|
$
|
83,386,887
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
||||||
|
|
|
|
|
|
||
|
|
March
31,
2005
|
|
December
31,
2005
|
|
||
|
|
(audited)
|
|
(unaudited)
|
|
||
|
|
|
|
|
|
||
CURRENT
LIABILITIES
|
|
|
|
|
|
||
Current
portion of convertible debenture
|
|
$
|
-
|
|
$
|
3,500,000
|
|
Notes
payable under the Standby Equity Distribution Agreement ( the
"SEDA")
|
|
|
6,500,000
|
|
|
-
|
|
Current
portion of other notes payable
|
|
|
19,035,263
|
|
|
6,817,581
|
|
Accounts
payable and accrued expenses
|
|
|
19,863,088
|
|
|
16,873,156
|
|
Liability
for common stock to be issued
|
|
|
-
|
|
|
53,167
|
|
Deferred
revenue
|
|
|
3,470,731
|
|
|
4,442,492
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
48,869,082
|
|
|
31,686,396
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
Convertible
debenture, net of unamortized debt discount of $602,452 and current
portion
|
|
|
-
|
|
|
10,897,548
|
|
Notes
payable and other long-term liabilities, net of current
maturities
|
|
|
999,196
|
|
|
800,659
|
|
|
|
|
|
|
|
|
|
Total
Long-Term Liabilities
|
|
|
999,196
|
|
|
11,698,207
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
49,868,278
|
|
|
43,384,603
|
|
|
|
|
|
|
|
|
|
MINORITY
INTERESTS
|
|
|
600,000
|
|
|
3,799,605
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
Preferred
stock, $.001 par value, 20,035,425 shares authorized and 35,378 shares
issued and outstanding at March 31, 2005 and December 31,
2005
|
|
|
35
|
|
|
35
|
|
Common
stock, $.001 par value, 1,500,000,000 shares authorized and 355,918,011
and 432,161,235 shares issued and outstanding at March 31, 2005 and
December 31, 2005
|
|
|
355,918
|
|
|
432,161
|
|
Additional
paid-in capital
|
|
|
43,195,250
|
|
|
62,126,473
|
|
Additional
paid-in capital, stock warrant
|
|
|
-
|
|
|
853,200
|
|
Accumulated
deficit
|
|
|
(21,196,550
|
)
|
|
(27,209,190
|
)
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity
|
|
|
22,354,653
|
|
|
36,202,679
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
$
|
72,822,931
|
|
$
|
83,386,887
|
|
|
|
For
the Three Months Ended
December
31,
|
|
For
the Nine Months Ended
December
31,
|
|
||||||||
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
REVENUES
|
|
$
|
17,127,133
|
|
$
|
26,244,606
|
|
$
|
23,265,366
|
|
$
|
75,297,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
COSTS AND EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of services (exclusive of depreciation and amortization)
|
|
|
8,633,278
|
|
|
13,790,195
|
|
|
11,158,590
|
|
|
36,466,453
|
|
Payroll,
professional fees and related expenses
|
|
|
4,268,757
|
|
|
4,206,066
|
|
|
8,794,048
|
|
|
13,405,613
|
|
Advertising
and marketing expenses
|
|
|
686,129
|
|
|
1,064,475
|
|
|
852,766
|
|
|
2,382,332
|
|
Office
rent and expenses
|
|
|
355,686
|
|
|
522,703
|
|
|
508,216
|
|
|
1,415,523
|
|
Other
general and administrative expenses
|
|
|
4,439,560
|
|
|
6,590,282
|
|
|
4,889,344
|
|
|
16,970,288
|
|
Depreciation
and amortization
|
|
|
792,717
|
|
|
1,293,993
|
|
|
1,290,212
|
|
|
3,163,689
|
|
Goodwill
impairment
|
|
|
-
|
|
|
3,764,429
|
|
|
-
|
|
|
3,764,429
|
|
Restructuring
costs
|
|
|
-
|
|
|
1,335,612
|
|
|
-
|
|
|
1,335,612
|
|
Total
Operating Costs and Expenses
|
|
|
19,176,127
|
|
|
32,567,755
|
|
|
27,493,176
|
|
|
78,903,939
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
LOSS
|
|
|
(2,048,994
|
)
|
|
(6,323,149
|
)
|
|
(4,227,810
|
)
|
|
(3,606,838
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE, NET
|
|
|
(905,896
|
)
|
|
(582,785
|
)
|
|
(1,232,280
|
)
|
|
(2,213,295
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MINORITY
INTERESTS IN NET INCOME OF CONSOLIDATED
SUBSIDIARIES
|
|
|
-
|
|
|
(49,798
|
)
|
|
-
|
|
|
(192,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
|
|
(2,954,890
|
)
|
|
(6,955,732
|
)
|
|
(5,460,090
|
)
|
|
(6,012,640
|
)
|
Provision
for Income Taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS APPLICABLE TO COMMON SHARES
|
|
$
|
(2,954,890
|
)
|
$
|
(6,955,732
|
)
|
$
|
(5,460,090
|
)
|
$
|
(6,012,640
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.0093
|
)
|
$
|
(0.0165
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
Diluted
|
|
$
|
(0.0093
|
)
|
$
|
(0.0165
|
)
|
$
|
(0.0202
|
)
|
$
|
(0.0154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
317,287,577
|
|
|
421,105,524
|
|
|
270,117,287
|
|
|
390,067,725
|
|
|
|
For
the Nine Months Ended
December
31,
|
|
||||
|
|
2004
|
|
2005
|
|
||
|
|
|
|
|
|
||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
||
Net
loss
|
|
$
|
(5,460,090
|
)
|
$
|
(6,012,640
|
)
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
Goodwill
impairment
|
|
|
-
|
|
|
3,764,429
|
|
Depreciation
and amortization
|
|
|
1,290,212
|
|
|
3,163,689
|
|
Restructuring
costs
|
|
|
-
|
|
|
1,335,612
|
|
Noncash
interest expense
|
|
|
375,150
|
|
|
536,810
|
|
Minority
interests
|
|
|
-
|
|
|
192,507
|
|
Investments
received for services
|
|
|
(450,000
|
)
|
|
-
|
|
Other
|
|
|
15,000
|
|
|
38,019
|
|
Changes
in assets and liabilities
|
|
|
|
|
|
|
|
Decrease
in accounts receivable
|
|
|
1,011,676
|
|
|
1,359,448
|
|
(Increase)
decrease in other current assets
|
|
|
743,283
|
|
|
(1,046,675
|
)
|
(Increase)
in other assets
|
|
|
(90,377
|
)
|
|
(725,039
|
)
|
Increase
(decrease) in accounts payable and accrued expenses
|
|
|
4,069,833
|
|
|
(4,142,706
|
)
|
Increase
in deferred revenue
|
|
|
431,247
|
|
|
95,353
|
|
Total
adjustments
|
|
|
7,396,024
|
|
|
4,571,447
|
|
|
|
|
|
|
|
|
|
Net
cash provided by (used in) operating activities
|
|
|
1,935,934
|
|
|
(1,441,193
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
Acquisition
of intangible assets
|
|
|
-
|
|
|
(6,778,129
|
)
|
Cash
paid for acquisitions
|
|
|
(32,960,500
|
)
|
|
(4,973,122
|
)
|
Cash
received in acquisition of subsidiaries
|
|
|
5,827,223
|
|
|
1,046,111
|
|
Capital
expenditures, net
|
|
|
(1,384,688
|
)
|
|
(2,674,904
|
)
|
|
|
|
|
|
|
|
|
Net
cash (used in) investing activities
|
|
|
(28,517,965
|
)
|
|
(13,380,044
|
)
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Borrowings
under convertible debenture
|
|
|
-
|
|
|
15,500,000
|
|
Borrowings
under acquisition bridge loan
|
|
|
15,200,000
|
|
|
-
|
|
Payments
on acquisition bridge loan
|
|
|
(2,200,000
|
)
|
|
(13,000,000
|
)
|
Borrowings/(payments)
under other notes payable, net
|
|
|
17,208,449
|
|
|
10,797,628
|
|
Investment
by minority interests
|
|
|
-
|
|
|
3,612,525
|
|
Debt
financing fees
|
|
|
-
|
|
|
(1,295,000
|
)
|
SEDA
conversion fees
|
|
|
-
|
|
|
(503,000
|
)
|
Proceeds
from common stock issuances
|
|
|
84,499
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Net
cash provided by financing activities
|
|
|
30,292,948
|
|
|
15,112,153
|
|
|
|
|
|
|
|
|
|
|
|
For
the Nine Months Ended
December
31,
|
|
||||
|
|
2004
|
|
2005
|
|
||
|
|
|
|
|
|
||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
|
$
|
3,710,917
|
|
$
|
290,916
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS - BEGINNING OF YEAR
|
|
|
1,955,607
|
|
|
4,669,787
|
|
|
|
|
|
|
|
|
|
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
|
$
|
5,666,524
|
|
$
|
4,960,703
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
Cash
paid during the period for interest
|
|
$
|
45,550
|
|
$
|
1,043,073
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NONCASH ACTIVITIES:
|
|
|
|
|
|
|
|
Issuance
of common stock for:
|
|
|
|
|
|
|
|
Conversion
of debt and accrued interest to common stock
|
|
$
|
13,000,000
|
|
$
|
17,950,304
|
|
Acquisition
of AFN
|
|
$
|
-
|
|
$
|
1,500,000
|
|
Acquisition
of InReach Internet
|
|
$
|
-
|
|
$
|
950,000
|
|
Acquisition
of Evergreen Broadband
|
|
$
|
-
|
|
$
|
231,073
|
|
Acquisition
of WazAlliance
|
|
$
|
-
|
|
$
|
135,333
|
|
Investment
banker retainer fee
|
|
$
|
-
|
|
$
|
58,500
|
|
Conversion
of payables to common stock
|
|
$
|
90,000
|
|
$
|
-
|
|
Debt
financing fees paid in common stock
|
|
$
|
1,760,000
|
|
$
|
-
|
|
Transfer
of notes payable/debenture maturities to the SEDA
|
|
$
|
9,200,000
|
|
$
|
7,700,000
|
|
Goodwill
recorded in acquisitions
|
|
$
|
31,893,329
|
|
$
|
5,743,263
|
|
Amortization
of SEDA deferred financing fees
|
|
$
|
-
|
|
$
|
660,000
|
|
Liability
for common stock to be issued
|
|
$
|
500,000
|
|
$
|
53,167
|
|
Adjustment
to minority interest
|
|
$
|
-
|
|
$
|
150,000
|
|
Note
payable in escrow
|
|
$
|
75,000
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
For
the Nine Months
Ended
December 31,
|
|||||||
|
|
2004
|
|
|
2005
|
|
||
Net
loss, as reported
|
|
$
|
(5,460,090
|
)
|
|
$
|
(6,012,640
|
)
|
Add:
Stock-based employee compensation expense included in reported net
loss
|
|
|
-
|
|
|
|
-
|
|
Deduct:
Total stock-based employee compensation expense determined under
fair
value based method for all awards
|
|
|
(6,093,029
|
)
|
|
|
(3,028,803
|
)
|
|
|
|
|
|
|
|
|
|
Pro
forma net loss
|
|
$
|
(11,553,120
|
)
|
|
$
|
(9,041,443
|
)
|
|
|
|
|
|
|
|
||
Net
loss per share:
|
|
|
|
|
|
|
|
|
As
reported
|
|
$
|
(0.0202
|
)
|
|
$
|
(0.0154
|
)
|
|
|
|
|
|
|
|
||
Pro
forma
|
|
$
|
(0.0428
|
)
|
|
$
|
(0.0232
|
)
|
|
|
|
|
|
|
|
|
|
2004
|
|
2005
|
|
||
Dividend
yield
|
|
None
|
|
None
|
|
||
Expected
volatility
|
|
|
60
|
%
|
|
60
|
%
|
Risk-free
interest rate
|
|
|
3.00
|
%
|
|
3.00
|
%
|
Expected
term (in years)
|
|
|
10.00
|
|
|
10.00
|
|
|
|
Estimated
Useful
Lives
(in years)
|
|
March
31,
2005
|
|
December
31,
2005
|
|
|||
|
|
|
|
(audited)
|
|
(unaudited)
|
|
|||
Furniture
and fixtures
|
|
|
7
|
|
$
|
387,861
|
|
$
|
471,816
|
|
Machinery
and equipment
|
|
|
5
|
|
|
13,584,088
|
|
|
16,587,715
|
|
Leasehold
improvements
|
|
|
7
|
|
|
263,452
|
|
|
638,584
|
|
Vehicles
|
|
|
5
|
|
|
287,733
|
|
|
226,470
|
|
Subtotals
|
|
|
|
|
|
14,523,134
|
|
|
17,924,585
|
|
Less
accumulated depreciation
|
|
|
|
|
|
(
1,330,078
|
)
|
|
(
3,638,431
|
)
|
Fixed
assets, net
|
|
|
|
|
$
|
13,193,056
|
|
$
|
14,286,154
|
|
|
|
March
31,
|
|
December
31,
|
|
||
|
|
2005
|
|
2005
|
|
||
|
|
(audited)
|
|
(unaudited)
|
|
||
Accounts
payable
|
|
$
|
14,083,842
|
|
$
|
12,331,292
|
|
Accrued
restructuring costs
|
|
|
-
|
|
|
1,335,612
|
|
Accrued
compensation
|
|
|
2,147,138
|
|
|
1,070,948
|
|
Accrued
interest expense
|
|
|
937,509
|
|
|
429,459
|
|
Other
accrued liabilities
|
|
|
2,694,599
|
|
|
1,705,845
|
|
Totals
|
|
$
|
19,863,088
|
|
$
|
16,873,156
|
|
|
|
Three
Months Ended
December
31,
|
|
Nine
Months Ended
December
31,
|
|
||||||||
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
18,724,342
|
|
$
|
26,244,606
|
|
$
|
28,056,994
|
|
$
|
76,859,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(2,862,304
|
)
|
|
(6,955,732
|
)
|
|
(5,182,331
|
)
|
|
(5,902,469
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.0087
|
)
|
|
(0.0165
|
)
|
|
(0.0185
|
)
|
|
(0.0149
|
)
|
Diluted
|
|
|
(0.0087
|
)
|
|
(0.0165
|
)
|
|
(0.0185
|
)
|
|
(0.0149
|
)
|
|
|
Three
Months Ended
December
31,
|
|
Nine
Months Ended
December
31,
|
|
||||||||
|
|
2004
|
|
2005
|
|
2004
|
|
2005
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
18,790,255
|
|
$
|
26,723,477
|
|
$
|
28,544,302
|
|
$
|
78,813,687
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(2,982,966
|
)
|
|
(6,913,378
|
)
|
|
(5,421,255
|
)
|
|
(5,703,671
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(0.0093
|
)
|
|
(0.0164
|
)
|
|
(0.0198
|
)
|
|
(0.0145
|
)
|
Diluted
|
|
|
(0.0093
|
)
|
|
(0.0164
|
)
|
|
(0.0198
|
)
|
|
(0.0145
|
)
|
Convertible
debenture payable to Cornell Capital
|
|
$
|
15,000,000
|
|
Notes
payable to Cornell Capital under the SEDA
|
|
|
-
|
|
Notes
payable to Cornell Capital
|
|
|
6,600,000
|
|
Notes
payable related to acquisitions
|
|
|
42,909
|
|
Other
notes payable and long-term obligations
|
|
|
975,331
|
|
|
|
|
22,618,240
|
|
Less:
Unamortized debt discount on convertible debenture
|
|
|
(602,452
|
)
|
Less:
Amounts due within one year
|
|
|
(10,317,581
|
)
|
Long-term
portion of debt
|
|
$
|
11,698,207
|
|
The
twelve-month period ending --
|
|
|
|
|
December
31, 2007
|
|
$
|
7,510,888
|
|
December
31, 2008
|
|
|
4,789,771
|
|
|
|
|
12,300,659
|
|
Less
- Unamortized debt discount on convertible debenture
|
|
|
(602,452
|
)
|
Long-term
portion of debt
|
|
$
|
11,698,207
|
|
|
|
Number
of
|
|
Weighted-Average
|
|
||
Stock
Options --
|
|
Options
|
|
Exercise
Price
|
|
||
|
|
|
|
|
|
||
Outstanding
- March 31, 2005
|
|
|
1,725,000
|
|
$
|
0.192
|
|
Granted
|
|
|
8,696,000
|
|
$
|
0.231
|
|
Exercised
|
|
|
-
|
|
$
|
-
|
|
Cancelled
|
|
|
-
|
|
$
|
-
|
|
Outstanding
- December 31, 2005
|
|
|
10,421,000
|
|
$
|
0.225
|
|
|
|
|
|
|
|
|
|
Exercisable
- December 31, 2005
|
|
|
1,085,416
|
|
$
|
0.176
|
|
|
|
Number
of
|
|
Weighted-Average
|
|
||
Stock
Warrants --
|
|
Warrants
|
|
Exercise
Price
|
|
||
|
|
|
|
|
|
||
Outstanding
- March 31, 2005
|
|
|
61,232,500
|
|
$
|
0.117
|
|
Granted
|
|
|
19,600,000
|
|
$
|
0.290
|
|
Exercised
|
|
|
-
|
|
$
|
-
|
|
Cancelled
|
|
|
1,000,000
|
|
$
|
0.018
|
|
Outstanding
- December 31, 2005
|
|
|
79,832,500
|
|
$
|
0.1609
|
|
|
|
|
|
|
|
|
|
Exercisable
- December 31, 2005
|
|
|
68,284,353
|
|
$
|
0.1584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The
Three Month Period
|
|
Voice
|
|
Internet
|
|
Wireless
|
|
|
|
|
|
|||||
Ended
December 31, 2004
|
|
Services
|
|
Services
|
|
Networks
|
|
Corporate
|
|
Total
|
|
|||||
Revenues
|
|
$
|
12,391,227
|
|
$
|
4,735,906
|
|
$
|
-
|
|
$
|
-
|
|
$
|
17,127,133
|
|
Cost
of revenues
|
|
|
(6,327,807
|
)
|
|
(2,305,471
|
)
|
|
-
|
|
|
-
|
|
|
(8,633,278
|
)
|
Other
operating expenses
|
|
|
(5,154,612
|
)
|
|
(1,942,579
|
)
|
|
(34,555
|
)
|
|
(2,618,386
|
)
|
|
(9,750,132
|
)
|
Depreciation
and amortization
|
|
|
(410,339
|
)
|
|
(158,731
|
)
|
|
(3,647
|
)
|
|
(220,000
|
)
|
|
(792,717
|
)
|
Interest
and other, net
|
|
|
83,312
|
|
|
(41,871
|
)
|
|
(70,216
|
)
|
|
(877,121
|
)
|
|
(905,896
|
)
|
Net
income (loss)
|
|
$
|
581,781
|
|
$
|
287,254
|
|
$
|
(108,418
|
)
|
$
|
(3,715,507
|
)
|
$
|
(2,954,890
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
35,024,547
|
|
$
|
18,245,134
|
|
$
|
15,267
|
|
$
|
20,583,028
|
|
$
|
73,867,976
|
|
Fixed
assets, net of accumulated depreciation
|
|
$
|
11,599,256
|
|
$
|
1,250,436
|
|
$
|
10,940
|
|
$
|
-
|
|
$
|
12,860,632
|
|
Goodwill,
net of impairment
|
|
$
|
18,634,703
|
|
$
|
14,070,629
|
|
$
|
-
|
|
$
|
-
|
|
$
|
32,705,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The
Three Month Period
|
|
Voice
|
|
Internet
|
|
Wireless
|
|
|
|
|
|
|||||
Ended
December 31, 2005
|
|
Services
|
|
Services
|
|
Networks
|
|
Corporate
|
|
Total
|
|
|||||
Revenues
|
|
$
|
18,505,132
|
|
$
|
4,534,617
|
|
$
|
3,204,857
|
|
$
|
-
|
|
$
|
26,244,606
|
|
Cost
of revenues
|
|
|
(9.862,109
|
)
|
|
(2,250,087
|
)
|
|
(1,678,000
|
)
|
|
-
|
|
|
(13,790,196
|
)
|
Other
operating expenses
|
|
|
(7,621,737
|
)
|
|
(2,164,515
|
)
|
|
(1,877,055
|
)
|
|
(720,218
|
)
|
|
(12,383,525
|
)
|
Depreciation
and amortization
|
|
|
(999,883
|
)
|
|
(101,227
|
)
|
|
(192,883
|
)
|
|
-
|
|
|
(1,293,993
|
)
|
Goodwill
impairment
|
|
|
(1,818,910
|
)
|
|
(1,945,519
|
)
|
|
-
|
|
|
-
|
|
|
(3,764,429
|
)
|
Restructuring
costs
|
|
|
-
|
|
|
(1,335,612
|
)
|
|
-
|
|
|
-
|
|
|
(1,335,612
|
)
|
Interest,
net
|
|
|
18,809
|
|
|
(2,271
|
)
|
|
21,093
|
|
|
(620,416
|
)
|
|
(582,785
|
)
|
Minority
interests
|
|
|
-
|
|
|
-
|
|
|
(49,798
|
)
|
|
-
|
|
|
(49,798
|
)
|
Net
loss
|
|
$
|
(1,778,698
|
)
|
$
|
(3,264,614
|
)
|
$
|
(571,786
|
)
|
$
|
(1,340,634
|
)
|
$
|
(6,955,732
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
51,450,926
|
|
$
|
19,681,335
|
|
$
|
10,923,229
|
|
$
|
1,331,397
|
|
$
|
83,386,887
|
|
Fixed
assets, net of accumulated depreciation
|
|
$
|
11,431,676
|
|
$
|
1,701,120
|
|
$
|
1,153,358
|
|
$
|
-
|
|
$
|
14,286,154
|
|
Goodwill,
net of impairment
|
|
$
|
20,568,280
|
|
$
|
16,248,330
|
|
$
|
494,219
|
|
$
|
-
|
|
$
|
37,310,829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
The
Nine Month Period
|
|
Voice
|
|
Internet
|
|
Wireless
|
|
|
|
|
|
|||||
Ended
December 31, 2004
|
|
Services
|
|
Services
|
|
Networks
|
|
Corporate
|
|
Total
|
|
|||||
Revenues
|
|
$
|
13,346,798
|
|
$
|
9,303,568
|
|
$
|
-
|
|
$
|
615,000
|
|
$
|
23,265,366
|
|
Cost
of revenues
|
|
|
(6,794,042
|
)
|
|
(4,364,548
|
)
|
|
-
|
|
|
-
|
|
|
(11,158,590
|
)
|
Other
operating expenses
|
|
|
(5,520,495
|
)
|
|
(3,730,718
|
)
|
|
(813,266
|
)
|
|
(4,979,895
|
)
|
|
(15,044,374
|
)
|
Depreciation
and amortization
|
|
|
(438,259
|
)
|
|
(327,679
|
)
|
|
(10,941
|
)
|
|
(513,333
|
)
|
|
(1,290,212
|
)
|
Interest
and other, net
|
|
|
83,312
|
|
|
(83,126
|
)
|
|
(70,216
|
)
|
|
(1,162,250
|
)
|
|
(1,232,280
|
)
|
Net
income (loss)
|
|
$
|
677,314
|
|
$
|
797,497
|
|
$
|
(894,423
|
)
|
$
|
(6,040,478
|
)
|
$
|
(5,460,090
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Nine Month Period
|
|
Voice
|
|
Internet
|
|
Wireless
|
|
|
|
|
|
|||||
Ended
December 31, 2005
|
|
Services
|
|
Services
|
|
Networks
|
|
Corporate
|
|
Total
|
|
|||||
Revenues
|
|
$
|
56,301,164
|
|
$
|
12,395,635
|
|
$
|
6,600,302
|
|
$
|
-
|
|
$
|
75,297,101
|
|
Cost
of revenues
|
|
|
(27,113,902
|
)
|
|
(5,988,818
|
)
|
|
(3,363,733
|
)
|
|
-
|
|
|
(36,466,453
|
)
|
Other
operating expenses
|
|
|
(22,853,007
|
)
|
|
(5,600,769
|
)
|
|
(4,031,131
|
)
|
|
(1,688,849
|
)
|
|
(34,173,756
|
)
|
Depreciation
and amortization
|
|
|
(2,511,742
|
)
|
|
(268,154
|
)
|
|
(376,500
|
)
|
|
(7,293
|
)
|
|
(3,163,689
|
)
|
Goodwill
impairment
|
|
|
(1,818,910
|
)
|
|
(1,945,519
|
)
|
|
-
|
|
|
-
|
|
|
(3,764,429
|
)
|
Restructuring
costs
|
|
|
-
|
|
|
(1,335,612
|
)
|
|
-
|
|
|
-
|
|
|
(1,335,612
|
)
|
Interest,
net
|
|
|
10,769
|
|
|
(15,886
|
)
|
|
30,294
|
|
|
(2,238,472
|
)
|
|
(2,213,295
|
)
|
Minority
interests
|
|
|
35,645
|
|
|
-
|
|
|
(228,152
|
)
|
|
-
|
|
|
(192,507
|
)
|
Net
income (loss)
|
|
$
|
2,050,017
|
|
$
|
(2,759,123
|
)
|
$
|
(1,368,920
|
)
|
$
|
(3,934,614
|
)
|
$
|
(6,012,640
|
)
|
ASSETS
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
2005
|
|
|
2004
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
Cash
and cash equivalent
|
|
$
|
4,669,787
|
|
$
|
1,955,607
|
|
Restricted
cash
|
429,954
|
-
|
|
||||
Accounts
receivable, net
|
12,658,313
|
139,553
|
|||||
Investments,
at cost
|
450,000
|
-
|
|||||
Prepaid
expenses and other current assets
|
2,061,697
|
10,983
|
|
||||
|
|
|
|
|
|
|
|
Total
Current Assets
|
20,269,751
|
2,106,143
|
|||||
|
|
|
|
|
|
|
|
Fixed
assets, net of depreciation
|
13,193,056
|
136,498
|
|||||
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
Other
assets
|
1,277,897
|
2,837
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
-
|
|
||||
Customer
lists, net of amortization
|
114,311
|
-
|
|||||
Intangible
assets, net of amortization
|
3,343,628
|
-
|
|
||||
Goodwill,
net of impairment
|
33,597,621
|
1,112,695
|
|||||
|
|
|
|
|
|
|
|
|
|
39,360,124
|
1,115,532
|
||||
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
3,358,173
|
|
|
|
2005
|
|
|
2004
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
Current
portion of long-term debt and notes payable
|
$
|
19,035,263
|
$
|
63,633
|
|||
Notes
payable 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
|
|
Davel
|
CloseCall
America
|
The
River
|
World
Trade
Network
|
Affinity
Telecom
|
Web
One
|
Ticon.net
|
Clover
|
Crescent
|
Shrevenet
|
August.net
|
Totals
|
||||||||||||||||||||||||||
Acquisition
Cost
|
|||||||||||||||||||||||||||||||||||||
Cash
|
$
|
14,000,000
|
$
|
8,000,000
|
$
|
1,690,732
|
$
|
1,200,000
|
$
|
1,513,000
|
$
|
1,660,000
|
$
|
750,000
|
$
|
707,736
|
$
|
944,767
|
$
|
1,060,000
|
$
|
1,730,000
|
$
|
33,256,235
|
|||||||||||||
Transaction
fees and expenses
|
425,000
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
425,000
|
|||||||||||||||||||||||||
Note(s)
payable
|
-
|
-
|
776,472
|
-
|
-
|
-
|
250,000
|
542,264
|
250,000
|
-
|
-
|
1,818,736
|
|||||||||||||||||||||||||
Stock
warrants
|
333,500
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
333,500
|
|||||||||||||||||||||||||
Common
stock
|
-
|
10,000,000
|
-
|
-
|
1,000,000
|
300,000
|
-
|
-
|
-
|
190,000
|
-
|
11,490,000
|
|||||||||||||||||||||||||
Excess
of liabilities assumed over assets acquired
|
-
|
-
|
192,545
|
109,986
|
-
|
349,054
|
564,876
|
-
|
-
|
-
|
33,986
|
1,250,447
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||
Aggregate
purchase price amounts
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,659,749
|
$
|
1,309,986
|
$
|
2,513,000
|
$
|
2,309,054
|
$
|
1,564,876
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,763,986
|
$
|
48,573,918
|
|||||||||||||
Number
of Shares Issued
|
-
|
39,999,999
|
-
|
-
|
5,000,000
|
1,500,000
|
-
|
-
|
-
|
878,816
|
-
|
47,378,815
|
|||||||||||||||||||||||||
Net
Assets of Acquired Companies
|
|||||||||||||||||||||||||||||||||||||
Aggregate
purchase price amounts
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,659,749
|
$
|
1,309,986
|
$
|
2,513,000
|
$
|
2,309,054
|
$
|
1,564,876
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,763,986
|
$
|
48,573,918
|
|||||||||||||
Excess
of liabilities assumed over assets acquired
|
-
|
-
|
(192,545
|
)
|
(109,986
|
)
|
-
|
(349,054
|
)
|
(564,876
|
)
|
-
|
-
|
-
|
(33,986
|
)
|
(1,250,447
|
)
|
|||||||||||||||||||
Net
Assets of Acquired Companies
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,467,204
|
$
|
1,200,000
|
$
|
2,513,000
|
$
|
1,960,000
|
$
|
1,000,000
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,730,000
|
$
|
47,323,471
|
|||||||||||||
Cash
and cash equivalents
|
$
|
3,854,576
|
$
|
1,588,292
|
$
|
104,730
|
$
|
19,468
|
$
|
75,629
|
$
|
-
|
$
|
(22,766
|
)
|
$
|
13,119
|
$
|
-
|
$
|
31,098
|
$
|
26,337
|
$
|
5,690,483
|
||||||||||||
Accounts
receivable, net
|
7,021,222
|
3,047,642
|
4,975
|
34,111
|
553,424
|
162,126
|
117,832
|
46,280
|
250,674
|
129,348
|
105,852
|
11,473,485
|
|||||||||||||||||||||||||
Other
current assets
|
740,918
|
1,366,134
|
6,370
|
105,093
|
16,422
|
-
|
2,854
|
19,298
|
27,027
|
42,982
|
-
|
2,327,097
|
|||||||||||||||||||||||||
Fixed
assets
|
11,830,544
|
347,620
|
50,344
|
126,794
|
71,140
|
74,558
|
299,033
|
234,520
|
277,838
|
167,476
|
130,437
|
13,610,304
|
|||||||||||||||||||||||||
Goodwill
|
-
|
16,470,541
|
2,659,749
|
1,309,986
|
2,073,162
|
2,309,054
|
1,564,876
|
1,186,942
|
900,623
|
1,020,703
|
1,763,986
|
31,259,622
|
|||||||||||||||||||||||||
Location
contracts
|
3,321,857
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
3,321,857
|
|||||||||||||||||||||||||
Other
intangible assets
|
-
|
248,178
|
391,466
|
326,364
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
966,008
|
|||||||||||||||||||||||||
Other
assets
|
1,186,407
|
11,513
|
45,582
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,243,502
|
|||||||||||||||||||||||||
Total
Assets
|
27,955,524
|
23,079,920
|
3,263,216
|
1,921,815
|
2,789,777
|
2,545,738
|
1,961,829
|
1,500,158
|
1,456,161
|
1,391,607
|
2,026,612
|
69,892,358
|
|||||||||||||||||||||||||
Minority
Interest
|
600,000
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
600,000
|
|||||||||||||||||||||||||
Current
portion of notes payable
|
-
|
61,144
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
61,144
|
|||||||||||||||||||||||||
Accounts
payable and accrued expenses
|
12,597,024
|
3,703,857
|
354,892
|
409,196
|
276,777
|
246,338
|
187,174
|
51,819
|
87,921
|
64,008
|
151,607
|
18,130,613
|
|||||||||||||||||||||||||
Deferred
revenue
|
-
|
1,178,199
|
358,348
|
262,008
|
-
|
339,400
|
774,655
|
198,339
|
125,292
|
77,599
|
145,005
|
3,458,845
|
|||||||||||||||||||||||||
Notes
payable and other long-term liabilities, net
|
-
|
136,720
|
82,772
|
50,611
|
-
|
-
|
-
|
-
|
48,181
|
-
|
-
|
318,284
|
|||||||||||||||||||||||||
Total
Liabilities
|
12,597,024
|
5,079,920
|
796,012
|
721,815
|
276,777
|
585,738
|
961,829
|
250,158
|
261,394
|
141,607
|
296,612
|
21,968,886
|
|||||||||||||||||||||||||
Net
Assets Acquired
|
$
|
14,758,500
|
$
|
18,000,000
|
$
|
2,467,204
|
$
|
1,200,000
|
$
|
2,513,000
|
$
|
1,960,000
|
$
|
1,000,000
|
$
|
1,250,000
|
$
|
1,194,767
|
$
|
1,250,000
|
$
|
1,730,000
|
$
|
47,323,471
|
|
|
|
|
|
|
CloseCall
|
|
|
|
World
Trade
|
|
|
Affinity
|
|
|
|
|
|
|
|
Proforma
|
|
Proforma
|
|
|||||||||||||
|
|
Mobilepro
|
|
Davel
|
|
America
|
|
The
River
|
|
Network
|
|
Web
One
|
|
Telecom
|
|
Ticon.net
|
|
Clover
|
|
Crescent
|
|
Adjustments
|
|
Results
|
|
||||||||||||
|
|
|
|
(6
Months
|
|
(9
Months
|
|
(4
Months
|
|
(8
Months
|
|
(6
Months
|
|
(6
Months
|
|
(6
Months
|
|
(6
Months
|
|
(6
Months
|
|
|
|
|
|
||||||||||||
|
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
|
|
|
||||||||||||
|
|
|
|
9/30/04)
|
|
9/30/04)
|
|
8/31/04)
|
|
8/31/04)
|
|
6/30/04)
|
|
6/30/04)
|
|
6/30/04)
|
|
6/30/04)
|
|
6/21/04)
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
REVENUES
|
|
$
|
46,508,144
|
|
$
|
28,724,000
|
|
$
|
17,594,548
|
|
$
|
1,431,590
|
|
$
|
1,948,267
|
|
$
|
1,049,336
|
|
$
|
2,070,807
|
|
$
|
1,038,517
|
|
$
|
662,746
|
|
$
|
847,551
|
|
$
|
-
|
|
$
|
101,875,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
OF REVENUES
|
|
|
22,551,240
|
|
|
19,590,000
|
|
|
9,830,799
|
|
|
683,843
|
|
|
941,834
|
|
|
380,285
|
|
|
895,057
|
|
|
425,106
|
|
|
335,018
|
|
|
680,830
|
|
|
-
|
|
|
56,314,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
23,956,904
|
|
|
9,134,000
|
|
|
7,763,749
|
|
|
747,747
|
|
|
1,006,433
|
|
|
669,051
|
|
|
1,175,750
|
|
|
613,411
|
|
|
327,728
|
|
|
166,721
|
|
|
-
|
|
|
45,561,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
27,478,063
|
|
|
10,033,000
|
|
|
7,278,721
|
|
|
656,006
|
|
|
1,057,706
|
|
|
729,470
|
|
|
948,665
|
|
|
698,997
|
|
|
331,498
|
|
|
657,395
|
|
|
-
|
|
|
49,869,521
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
|
|
(3,521,159
|
)
|
|
(899,000
|
)
|
|
485,028
|
|
|
91,741
|
|
|
(51,273
|
)
|
|
(60,419
|
)
|
|
227,085
|
|
|
(85,586
|
)
|
|
(3,770
|
)
|
|
(490,674
|
)
|
|
-
|
|
|
(4,308,027
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
(1,838,563
|
)
|
|
(4,124,000
|
)
|
|
2,587
|
|
|
(18,462
|
)
|
|
(2,848
|
)
|
|
(3,107
|
)
|
|
(12,000
|
)
|
|
(41,506
|
)
|
|
8,255
|
|
|
(20,326
|
)
|
|
(1,748,000
|
)
|
|
(7,797,970
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
|
|
(5,359,722
|
)
|
|
(5,023,000
|
)
|
|
487,615
|
|
|
73,279
|
|
|
(54,121
|
)
|
|
(63,526
|
)
|
|
215,085
|
|
|
(127,092
|
)
|
|
4,485
|
|
|
(511,000
|
)
|
|
(1,748,000
|
)
|
|
(12,105,997
|
)
|
Provision
for income taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS APPLICABLE TO COMMON SHARES
|
|
$
|
(5,359,722
|
)
|
$
|
(5,023,000
|
)
|
$
|
487,615
|
|
$
|
73,279
|
|
$
|
(54,121
|
)
|
$
|
(63,526
|
)
|
$
|
215,085
|
|
$
|
(127,092
|
)
|
$
|
4,485
|
|
$
|
(511,000
|
)
|
$
|
(1,748,000
|
)
|
$
|
(12,105,997
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER BASIC AND DILUTED SHARES
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.04
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARES
OUTSTANDING
|
|
|
289,933,904
|
|
|
-
|
|
|
21,666,666
|
|
|
-
|
|
|
-
|
|
|
562,500
|
|
|
1,666,667
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
313,829,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACQUISITION
DATE
|
|
|
|
|
|
11/15/04
|
|
|
10/15/04
|
|
|
9/16/04
|
|
|
9/15/04
|
|
|
8/13/04
|
|
|
8/2/04
|
|
|
7/14/04
|
|
|
7/6/04
|
|
|
6/21/04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE
1> August.net acquired on April 21, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE
2> Shrevenet acquired on June 3, 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CloseCall
|
|
|
|
World
Trade
|
|
|
Affinity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proforma
|
|
Proforma
|
|
||||||||||||||||
|
|
Mobilepro
|
|
Davel
|
|
America
|
|
The
River
|
|
Network
|
|
Web
One
|
|
Telecom
|
|
Ticon.net
|
|
Clover
|
|
Crescent
|
|
Shrevenet
|
|
August.net
|
|
DFW
|
|
Adjustments
|
|
Results
|
|
|||||||||||||||
|
|
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
(12
Months
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
Ended
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
12/31/03)
|
|
12/31/03)
|
|
4/30/04)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
12/31/03)
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
REVENUES
|
|
$
|
311,355
|
|
$
|
81,773,000
|
|
$
|
24,353,746
|
|
$
|
4,752,175
|
|
$
|
3,543,871
|
|
$
|
2,276,657
|
|
$
|
2,344,635
|
|
$
|
2,099,265
|
|
$
|
1,534,049
|
|
$
|
1,854,289
|
|
$
|
2,024,627
|
|
$
|
1,511,340
|
|
$
|
1,764,260
|
|
$
|
-
|
|
$
|
130,143,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
OF REVENUES
|
|
|
117,349
|
|
|
60,641,000
|
|
|
13,742,826
|
|
|
2,218,434
|
|
|
1,530,271
|
|
|
755,167
|
|
|
912,414
|
|
|
908,377
|
|
|
588,661
|
|
|
1,359,690
|
|
|
806,540
|
|
|
810,039
|
|
|
904,377
|
|
|
-
|
|
|
85,295,145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
194,006
|
|
|
21,132,000
|
|
|
10,610,920
|
|
|
2,533,741
|
|
|
2,013,600
|
|
|
1,521,490
|
|
|
1,432,221
|
|
|
1,190,888
|
|
|
945,388
|
|
|
494,599
|
|
|
1,218,087
|
|
|
701,301
|
|
|
859,883
|
|
|
-
|
|
|
44,848,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
1,977,158
|
|
|
32,739,000
|
|
|
10,358,897
|
|
|
2,275,667
|
|
|
2,176,035
|
|
|
1,555,136
|
|
|
1,460,427
|
|
|
1,266,873
|
|
|
873,436
|
|
|
1,919,626
|
|
|
1,212,492
|
|
|
688,840
|
|
|
788,570
|
|
|
-
|
|
|
59,292,157
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
|
|
(1,783,152
|
)
|
|
(11,607,000
|
)
|
|
252,023
|
|
|
258,074
|
|
|
(162,435
|
)
|
|
(33,646
|
)
|
|
(28,206
|
)
|
|
(75,985
|
)
|
|
71,952
|
|
|
(1,425,027
|
)
|
|
5,595
|
|
|
12,461
|
|
|
71,313
|
|
|
-
|
|
|
(14,444,033
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSE)
|
|
|
(374,692
|
)
|
|
(34,584,000
|
)
|
|
(88,361
|
)
|
|
(230,857
|
)
|
|
(10,903
|
)
|
|
(8,737
|
)
|
|
(10,000
|
)
|
|
(10,322
|
)
|
|
23,652
|
|
|
(30,832
|
)
|
|
(38,821
|
)
|
|
-
|
|
|
(33,456
|
)
|
|
(3,496,000
|
)
|
|
(11,752,329
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,141,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
|
|
(2,157,844
|
)
|
|
(46,191,000
|
)
|
|
163,662
|
|
|
27,217
|
|
|
(173,338
|
)
|
|
(42,383
|
)
|
|
(38,206
|
)
|
|
(86,307
|
)
|
|
95,604
|
|
|
(1,455,859
|
)
|
|
(33,226
|
)
|
|
12,461
|
|
|
37,857
|
|
|
(3,496,000
|
)
|
|
(26,196,362
|
)
|
Provision
for income taxes
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS APPLICABLE TO COMMON SHARES
|
|
$
|
(2,157,844
|
)
|
$
|
(46,191,000
|
)
|
$
|
163,662
|
|
$
|
27,217
|
|
$
|
(173,338
|
)
|
$
|
(42,383
|
)
|
$
|
(38,206
|
)
|
$
|
(86,307
|
)
|
$
|
95,604
|
|
$
|
(1,455,859
|
)
|
$
|
(33,226
|
)
|
$
|
12,461
|
|
$
|
37,857
|
|
$
|
(3,496,000
|
)
|
$
|
(26,196,362
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS PER BASIC AND DILUTED SHARES
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHARES
OUTSTANDING
|
|
|
111,591,658
|
|
|
-
|
|
|
39,999,999
|
|
|
-
|
|
|
-
|
|
|
1,500,000
|
|
|
5,000,000
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
878,816
|
|
|
-
|
|
|
17,682,284
|
|
|
|
|
|
176,652,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ACQUISITION
DATE
|
|
|
|
|
|
11/15/04
|
|
|
10/15/04
|
|
|
9/16/04
|
|
|
9/15/04
|
|
|
8/13/04
|
|
|
8/2/04
|
|
|
7/14/04
|
|
|
7/6/04
|
|
|
6/21/04
|
|
|
6/3/04
|
|
|
4/21/04
|
|
|
1/20/04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We
have not authorized any dealer, salesperson or other person to provide
any
information or make any representations about Mobilepro Corp. except
the
information or representations contained in this Prospectus. You
should
not rely on any additional information or representations if
made.
|
|
|
|
|
|
-----------------------
|
|
|
|
|
|
This
Prospectus does not constitute an offer to sell, or a solicitation
of an
offer to buy any securities:
·except
the common stock offered by this Prospectus;
·in
any jurisdiction in which the offer or solicitation is not
authorized;
·in
any jurisdiction where the dealer or other salesperson is not qualified
to
make the offer or solicitation;
·to
any person to whom it is unlawful to make the offer or solicitation;
or
·to
any person who is not a United States resident or who is outside
the
jurisdiction of the United States.
The
delivery of this Prospectus or any accompanying sale does not imply
that:
·there
have been no changes in the affairs of Mobilepro Corp. after the
date of
this Prospectus; or
·the
information contained in this Prospectus is correct after the date
of this
Prospectus.
|
----------------------
PROSPECTUS
---------------------
295,219,537
Shares of
Common
Stock
MOBILEPRO
CORP.
February
28, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|