DELAWARE
|
87-0419571
|
(State
or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S.
Employer Identification
No.)
|
6701
Democracy Boulevard, Suite
202, Bethesda, MD
|
20817
|
(Address
of Principal Executive
Offices)
|
(Zip
Code)
|
ITEM
NUMBER AND CAPTION
|
PAGE
|
||
PART
I
|
|||
Item
1.
|
Description
of Business
|
1
|
|
Item
2.
|
Description
of Property
|
28
|
|
Item
3.
|
Legal
Proceedings
|
28
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
29
|
|
|
|||
PART
II
|
|
||
|
|||
Item
5.
|
Market
for Common Equity, Related Stockholder Matters and Small Business
Issuer
Purchases of Equity Securities
|
30
|
|
Item
6.
|
Management’s
Discussion and Analysis
|
32
|
|
Item
7.
|
Financial
Statements
|
F-1
|
|
Item 8. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
47
|
|
Item 8A. | Controls and Procedures |
47
|
|
Item
8B.
|
Other
Information
|
47
|
|
PART
III
|
|||
Item
9.
|
Directors
and Executive Officers of the Registrant
|
48
|
|
Item
10.
|
Executive
Compensation
|
52
|
|
Item
11.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
57
|
|
Item
12.
|
Certain
Relationships and Related Transactions
|
59
|
|
Item
13.
|
Exhibits
|
59
|
|
Item
14.
|
Principal
Accountant Fees and Services
|
65
|
|
Corporate
|
Our
Corporate business segment serves as the holding company for our
three
revenue generating divisions: technology, voice and internet services.
The
Corporate business segment functions as the strategic center for
the
operations of the fully consolidated entity.
|
Technology
|
Our
wireless technology development efforts are conducted by our wholly-owned
subsidiary, NeoReach, Inc., and its subsidiary, NeoReach Wireless,
Inc.
NeoReach, Inc. is focused on our ongoing ZigBee chip development
work.
NeoReach Wireless, Inc. is focused on our strategic initiatives within
the
Wi-Fi / Wi-Max space.
|
Voice Services
|
Our
voice services segment is led by CloseCall America, Inc., a Stevensville,
Maryland-based Competitive Local Exchange Carrier, and Davel
Communications, Inc., a Cleveland, Ohio-based independent payphone
provider. 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.
Davel
owns and operates approximately 38,000 payphones in 45 states and
is one
of the largest independent payphone operators in the United
States.
|
Internet Services
|
Our
internet services segment is led by DFW Internet Services, Inc. (doing
business as “Nationwide Internet”), an Irving, Texas-based internet
services provider. 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.
|
Quarter
Ended March 31,
|
Year
Ended March 31,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Operating
Results:
|
|||||||||||||
Operating
Revenue
|
$
|
23,242,778
|
$
|
311,355
|
$
|
46,508,144
|
$
|
311,355
|
|||||
Cost
of Revenues
|
$
|
11,392,650
|
$
|
117,349
|
$
|
22,551,240
|
$
|
117,349
|
|||||
Gross
Profit
|
$
|
11,850,128
|
$
|
194,006
|
$
|
23,956,904
|
$
|
194,006
|
|||||
Operating
Expenses
|
$
|
11,143,477
|
$
|
766,349
|
$
|
27,478,063
|
$
|
1,977,158
|
|||||
Net
Income (Loss)
|
$
|
100,368
|
$
|
(726,503
|
)
|
$
|
(5,359,722
|
)
|
$
|
(2,157,844
|
)
|
||
Year
Ended March 31,
|
|||||||
2005
|
2004
|
||||||
Balance
Sheet Data:
|
|||||||
Current
Assets
|
$
|
20,269,751
|
$
|
2,106,143
|
|||
Current
Liabilities
|
$
|
48,869,082
|
$
|
2,511,654
|
|||
Accumulated
Deficit
|
$
|
(21,196,550
|
)
|
$
|
(15,836,828
|
)
|
|
Shareholder’s
Equity
|
$
|
22,954,653
|
$
|
286,319
|
Years
Ended March 31,
|
Percentage
of Revenues
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Corporate
|
$
|
615,000
|
$
|
--
|
1.3
|
%
|
0
|
%
|
|||||
Technology
|
--
|
--
|
0
|
%
|
0
|
%
|
|||||||
Voice
Services
|
32,009,084
|
--
|
68.8
|
%
|
0
|
%
|
|||||||
Internet
Services
|
13,884,060
|
311,355
|
29.9
|
%
|
100
|
%
|
|||||||
Total
Revenue
|
$
|
46,508,144
|
$
|
311,355
|
100
|
%
|
100
|
%
|
Corporate
|
4
full-time employees and 1 consultant
|
Technology
|
5
full-time employees and 1 consultant
|
Voice Services
|
136
full-time employees and 1 consultant
|
Internet Services
|
119
full-time employees
|
Bid
Price Per Share
|
|||||||
High
|
Low
|
||||||
2003
|
|||||||
April
2003 - June 2003
|
$
|
0.04
|
$
|
0.01
|
|||
July
2003 - September 2003
|
$
|
0.07
|
$
|
0.01
|
|||
October
2003 - December 2003
|
$
|
0.04
|
$
|
0.02
|
|||
2004
|
|||||||
January
2004 - March 2004
|
$
|
0.13
|
$
|
0.04
|
|||
April
2004 - June 2004
|
$
|
0.29
|
$
|
0.10
|
|||
July
2004 - September 2004
|
$
|
0.28
|
$
|
0.14
|
|||
October
2004 - December 2004
|
$
|
0.24
|
$
|
0.14
|
|||
2005
|
|||||||
January
2005 - March 2005
|
$
|
0.25
|
$
|
0.16
|
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
|
$0.25
|
53,963
|
|||
Equity
compensation plans not approved by security holders (2)
|
62,807,500
|
$0.119
|
N/A
|
|||
Total
|
62,957,500
|
$0.119
|
N/A
|
(1)
|
Includes
1,000,000 shares available for issuance under Mobilepro’s 2001 Equity
Performance Plan, or Plan, all of which may be issued as stock options,
restricted stock or stock bonuses. In April 2004, the Board approved
an
increase in the number of shares available for issuance under the
Plan.
That increase has not yet been submitted to the Company
stockholders.
|
(2)
|
Includes
options to purchase 725,000 shares and warrants to purchase 61,232,500
shares outstanding as of March 31, 2005 that were issued by Mobilepro
under non-plan options and warrants.
|
Technology
|
Our
wireless technology development efforts are conducted by our wholly-owned
subsidiary NeoReach, Inc. and its subsidiary NeoReach Wireless, Inc.
NeoReach, Inc. is focused on our ongoing ZigBee chip development
work
while NeoReach Wireless, Inc. is focused on our strategic initiatives
within the Wi-Fi / Wi-Max space.
|
Voice Services
|
Our
voice services segment is led by CloseCall America, Inc., a Stevensville,
Maryland-based Competitive Local Exchange Carrier and Davel
Communications, Inc., a Cleveland, Ohio-based independent payphone
provider. 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.
Davel
owns and operates approximately 38,000 payphones in 45 states and
is one
of the largest independent payphone operators in the United
States.
|
Internet Services
|
Our
internet services segment is led by DFW Internet Services, Inc. (doing
business as “Nationwide Internet”), an Irving, Texas-based internet
services provider. 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.
|
Year
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
expenses
|
1,574,502
|
21,350
|
|||||
EBITDA
|
(1,342,857
|
)
|
(1,762,152
|
)
|
Corporate
|
4
full-time employees and 1 consultant
|
Technology
|
5
full-time employees and 1 consultant
|
Voice Services
|
136
full-time employees and 1 consultant
|
Internet Services
|
119
full-time employees
|
•
|
|
With
a price of less than $5.00 per share;
|
||
|
||||
•
|
|
That
are not traded on a “recognized” national exchange;
|
||
|
||||
•
|
|
Whose
prices are 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
|
||
|
||||
•
|
|
In
issuers with 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 with average revenues of less than $6.0 million for the last three
years.
|
•
|
|
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 shareholders’ percentage
ownership;
|
||
|
||||
•
|
|
Assume
liabilities;
|
||
|
||||
•
|
|
Record
goodwill and non-amortizable intangible assets that will be subject
to
impairment testing on a regular basis and potential periodic impairment
charges;
|
||
|
||||
•
|
|
Incur
amortization expenses related to certain intangible
assets;
|
||
|
||||
•
|
|
Incur
large and immediate write-offs, and restructuring and other related
expenses; or
|
||
|
||||
•
|
|
Become
subject to litigation.
|
•
|
|
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;
|
||
|
||||
•
|
|
general
conditions in the wireless communications and internet
industries;
|
|
||||
•
|
|
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 the Company 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 or our pay telephone
division from third party payors;
|
|||
•
|
the
continued erosion of coin revenues resulting from the penetration
of
wireless technologies and prepaid calling cards; and
|
|||
•
|
the
continued shift from dial-up ISP service to broadband ISP
service.
|
Page(s)
|
|
Report
of Independent Registered Public Accounting Firm
|
F-1
|
Consolidated
Balance Sheets as of March 31, 2005 and 2004
|
F-2
to F-3
|
Consolidated
Statements of Operations for the Years Ended March 31, 2005 and
2004
|
F-4
|
Consolidated
Statements of Changes in Stockholders’ Equity (Deficit) for the Years
Ended March 31, 2005 and 2004
|
F-5
|
Consolidated
Statements of Cash Flows for the Years Ended March 31, 2005 and
2004
|
F-6
to F-7
|
Notes
to Consolidated Financial Statements
|
F-8
|
2005
|
2004
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,669,787
|
$
|
1,955,607
|
|||
Restricted
cash
|
429,954
|
-
|
|||||
Accounts
receivable, net
|
12,658,313
|
139,553
|
|||||
Investments,
at cost
|
450,000
|
-
|
|||||
Prepaid
expenses and other current assets
|
2,061,697
|
10,983
|
|||||
Total
Current Assets
|
20,269,751
|
2,106,143
|
|||||
Fixed
assets, net of depreciation
|
13,193,056
|
136,498
|
|||||
OTHER
ASSETS
|
|||||||
Other
assets
|
1,277,897
|
2,837
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
-
|
|||||
Customer
lists, net of amortization
|
114,311
|
-
|
|||||
Intangible
assets, net of amortization
|
3,343,628
|
-
|
|||||
Goodwill,
net of impairment
|
33,597,621
|
1,112,695
|
|||||
39,360,124
|
1,115,532
|
||||||
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
3,358,173
|
2005
|
2004
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of long-term debt and notes payable
|
$
|
19,035,263
|
$
|
63,633
|
|||
Notes
payable
|
6,500,000
|
1,800,000
|
|||||
Deferred
revenue
|
3,470,731
|
58,202
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
589,819
|
|||||
Total
Current Liabilities
|
48,869,082
|
2,511,654
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Long-term
debt and notes payable, net of current maturities
|
999,196
|
560,200
|
|||||
Total
Long-Term Liabilities
|
999,196
|
560,200
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
3,071,854
|
|||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|||||||
Preferred
stock, $.001 par value, 5,035,425 shares authorized and 35,378
shares
issued and outstanding at March 31, 2005 and 2004
|
35
|
35
|
|||||
Common
stock, $.001 par value, 600,000,000 shares authorized and 355,918,011
and
220,493,159 shares issued and outstanding at March 31, 2005 and
2004
|
355,918
|
220,493
|
|||||
Additional
paid-in capital
|
43,195,250
|
15,902,619
|
|||||
Accumulated
deficit
|
(21,196,550
|
)
|
(15,836,828
|
)
|
|||
Minority
interest
|
600,000
|
-
|
|||||
Total
Stockholders' Equity (Deficit)
|
22,954,653
|
286,319
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
72,822,931
|
$
|
3,358,173
|
2005
|
2004
|
||||||
REVENUES
|
$
|
46,508,144
|
$
|
311,355
|
|||
COSTS
OF REVENUES
|
22,551,240
|
117,349
|
|||||
GROSS
PROFIT
|
23,956,904
|
194,006
|
|||||
OPERATING
EXPENSES
|
|||||||
Professional
fees and compensation expenses
|
12,555,710
|
1,577,782
|
|||||
Advertising
and marketing expenses
|
1,610,285
|
36,995
|
|||||
Research
and development costs
|
30,324
|
1,620
|
|||||
General
and administrative expenses
|
10,018,298
|
186,599
|
|||||
Office
rent and expenses
|
952,475
|
105,142
|
|||||
Travel
and entertainment expenses
|
243,758
|
48,020
|
|||||
Depreciation
and amortization
|
2,067,213
|
21,000
|
|||||
Total
Operating Expenses
|
27,478,063
|
1,977,158
|
|||||
LOSS
BEFORE OTHER INCOME (EXPENSE)
|
(3,521,159
|
)
|
(1,783,152
|
)
|
|||
OTHER
INCOME (EXPENSE)
|
|||||||
Draw
discounts
|
(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
|
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
|
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
|
)
|
||||
Incease
(decrease) in accounts payable and accrued expenses
|
3,141,501
|
(647,536
|
)
|
||||
Total
adjustments
|
5,999,384
|
(188,666
|
)
|
||||
Net
cash provided by (used in) operating activities
|
639,662
|
(2,346,510
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Cash
paid for acquisitions
|
(32,960,500
|
)
|
(350,000
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
5,827,223
|
47,756
|
|||||
Acquisition
of intangible assets
|
(1,192,608
|
)
|
-
|
||||
Capital
expenditures, net
|
(2,109,338
|
)
|
(999
|
)
|
|||
Net
cash (used in) investing activities
|
(30,435,223
|
)
|
(303,243
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from common stock issuances
|
13,098,406
|
3,145,000
|
|||||
Payments
of other convertible debentures
|
-
|
(50,000
|
)
|
||||
Change
in convertible debentures - officers, net
|
-
|
(97,617
|
)
|
||||
Proceeds
(payments) of long-term debt, net
|
19,411,335
|
1,601,262
|
|||||
Net
cash provided by financing activities
|
32,509,741
|
4,598,645
|
2005
|
2004
|
||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
2,714,180
|
1,948,892
|
|||||
CASH
AND CASH EQUIVALENTS - BEGINNING OF YEAR
|
1,955,607
|
6,715
|
|||||
CASH
AND CASH EQUIVALENTS - END OF YEAR
|
$
|
4,669,787
|
$
|
1,955,607
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|||||||
Cash
paid during the year for interest
|
$
|
533,050
|
$
|
-
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Conversion
of other convertible debentures
|
$
|
-
|
$
|
206,585
|
|||
Conversion
of advances and payables to common stock
|
$
|
-
|
$
|
563,616
|
|||
Deferred
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
-
|
|||
Acquisition
of DFW Internet Services, Inc.
|
$
|
-
|
$
|
500,000
|
|||
Liability
for common stock to be issued
|
$
|
300,000
|
$
|
-
|
|||
Assignment
of bridge debentures receivable
|
$
|
1,000,000
|
$
|
-
|
|||
Goodwill
recorded in acquisitions
|
$
|
32,785,618
|
$
|
525,185
|
NOTE 1- |
ORGANIZATION
AND BASIS OF
PRESENTATION
|
NOTE 2- |
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
|
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
|
NOTE 3- |
BRIDGE
DEBENTURES RECEIVABLE
|
NOTE 4- |
INTANGIBLE
ASSETS - VOICE
ACQUISITIONS
|
NOTE 5- |
FIXED
ASSETS
|
|
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
6-
|
LIABILITY
FOR COMMON STOCK TO BE
ISSUED
|
NOTE 7- |
NOTE
PAYABLE - MARYLAND DEPARTMENT OF BUSINESS & ECONOMIC DEVELOPMENT
|
NOTE 8- |
NOTES
PAYABLE
|
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
|
NOTE 9- |
STANDBY
EQUITY DISTRIBUTION AGREEMENT AND EQUITY LINE OF CREDIT
|
NOTE 10- |
LONG-TERM
DEBT
|
Years
Ended March 31,
|
||||
2006
|
$
|
11,754
|
||
2007
|
53,465
|
|||
Total
|
$
|
65,219
|
||
Computer
and mailing equipment
|
$
43,812
|
Less
- accumulated amortization
|
(10,728)
|
$
25,084
|
Years
Ending
March
31,
|
Capital
Leases
|
Operating
Leases
|
|||||
2006
|
$
|
-
|
$
|
593,515
|
|||
2007
|
10,508
|
338,518
|
|||||
2008
|
4,068
|
245,344
|
|||||
2009
|
-
|
65,470
|
|||||
2010
|
-
|
55,354
|
|||||
Total
minimum lease payments
|
25,084
|
$
|
1,077,391
|
||||
Less
- amounts representing interest
|
(4,215)
|
||||||
Less
- current portion
|
(5,354)
|
||||||
Long-term
capital lease obligation
|
$ |
15,515
|
NOTE 11- |
STOCKHOLDERS’
EQUITY (DEFICIT)
|
Number
of Options |
Weighted-Average 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
|
Number
of
Options
|
Weighted-Average
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
|
$
|
(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
|
NOTE 12- |
PATENTS
|
NOTE 13- |
CONTINGENCIES
|
NOTE 14- |
COMMITMENTS
|
NOTE 15- |
IMPAIRMENT
OF GOODWILL
|
NOTE 16- |
LITIGATION/
LEGAL PROCEEDINGS
|
NOTE
17-
|
INCOME
TAXES
|
|
|
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
|
|
$
|
-
|
|
$
|
-
|
|
NOTE 18- |
DIAL
AROUND COMPENSATION
|
NOTE 19- |
SEGMENT
INFORMATION
|
Voice
|
Internet
|
|||||||||||||||
Corporate
|
Technology
|
Services
|
Services
|
Total
|
||||||||||||
Revenues
|
$
|
615,000
|
$
|
-
|
$
|
32,009,084
|
$
|
13,884,060
|
$
|
46,508,144
|
||||||
Direct
costs of revenues
|
-
|
-
|
15,816,901
|
6,734,339
|
22,551,240
|
|||||||||||
Gross
profit
|
615,000
|
-
|
16,192,183
|
7,149,721
|
23,956,904
|
|||||||||||
Operating
expenses
|
1,287,945
|
953,976
|
16,707,959
|
6,460,970
|
25,410,850
|
|||||||||||
Depreciation,
amortization and impairment
|
1,108,483
|
14,588
|
1,093,620
|
225,672
|
2,442,363
|
|||||||||||
Other
income
|
-
|
-
|
111,089
|
-
|
111,089
|
|||||||||||
Interest
(net)
|
1,393,108
|
43,927
|
23,523
|
113,944
|
1,574,502
|
|||||||||||
Net
income (loss)
|
$
|
(3,171,536
|
)
|
$
|
(1,012,492
|
)
|
$
|
(1,521,830
|
)
|
$
|
349,136
|
$
|
(5,359,722
|
)
|
||
Segment
assets
|
$
|
19,522,553
|
$
|
14,240
|
$
|
35,166,195
|
$
|
18,119,944
|
$
|
72,822,932
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
-
|
$
|
7,293
|
$
|
11,804,050
|
$
|
1,381,713
|
$
|
13,193,056
|
Voice
|
Internet
|
|||||||||||||||
Corporate
|
Technology
|
Services
|
Services
|
Total
|
||||||||||||
Revenues
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
311,355
|
$
|
311,355
|
||||||
Direct
costs of revenues
|
-
|
-
|
-
|
117,349
|
117,349
|
|||||||||||
Gross
profit
|
-
|
-
|
-
|
194,006
|
194,006
|
|||||||||||
Operating
expenses
|
701,758
|
1,115,946
|
-
|
138,454
|
1,956,158
|
|||||||||||
Depreciation,
amortization and impairment
|
353,342
|
14,589
|
-
|
6,411
|
374,342
|
|||||||||||
Interest
(net)
|
-
|
18,745
|
-
|
2,605
|
21,350
|
|||||||||||
Net
income (loss)
|
$
|
(1,055,100
|
)
|
$
|
(1,149,280
|
)
|
$
|
-
|
$
|
46,536
|
$
|
(2,157,844
|
)
|
|||
Segment
assets
|
$
|
1,877,377
|
$
|
29,151
|
$
|
-
|
$
|
1,451,644
|
$
|
3,358,172
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
-
|
$
|
21,881
|
$
|
-
|
$
|
114,617
|
$
|
136,496
|
NOTE 20- |
SUBSEQUENT
EVENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Mobilepro
|
|
Davel
|
|
CloseCall
America
|
|
The
River
|
|
World
Trade
Network
|
|
Web
One
|
|
Affinity
Telecom
|
|
Ticon.net
|
|
Clover
|
|
Crescent
|
|
Proforma
Adjustments
|
|
Proforma
Results
|
|
||||||||||||
|
|
|
|
(6
Months Ended
9/30/04)
|
|
(9
Months Ended
9/30/04)
|
|
(4
Months Ended 8/31/04)
|
|
(8
Months Ended 8/31/04)
|
|
(6
Months Ended 6/30/04)
|
|
(6
Months Ended 6/30/04)
|
|
(6
Months Ended 6/30/04)
|
|
(6
Months Ended 6/30/04)
|
|
(6
Months Ended 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mobilepro
|
Davel
|
CloseCall
America
|
The
River
|
World
Trade Network
|
DWeb
One (DFWT)
|
|
Affinity
Telecom
|
Ticon.net
|
Clover
|
Crescent
|
Shrevenet
|
August.net
|
DFW
|
Proforma
Adjustments
|
Proforma
Results
|
||||||||||||||||||||||||||||||
(12
Months Ended 12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended 4/30/04)
|
(12
Months
Ended
12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended 12/31/03)
|
(12
Months Ended
12/31/03)
|
(12
Months Ended 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
|
||||||||||||||||||||||||||||||||||
NOTE 1> DFW includes Internet Express. |
Name
|
Age
|
Position
|
||
Jay
O. Wright
|
35
|
President,
Chief Executive Officer and Chairman of the Board
|
||
Kurt
Gordon
|
39
|
Chief
Financial Officer
|
||
Geoffrey
B. Amend
|
37
|
General
Counsel and
Secretary
|
||
Jack
W. Beech
|
34
|
President,
DFW Internet Services, Inc. and Director of the Company
|
||
Tom
Mazerski
|
52
|
Chief
Executive Officer, CloseCall America, Inc.
|
||
Tammy
L. Martin
|
40
|
Chief
Executive Officer, President and General Counsel of Davel Communications,
Inc.
|
||
Bruce
Sanguinetti
|
50
|
Chief
Executive Officer and President, NeoReach, Inc.
|
||
John
Dumbleton
|
37
|
Executive
Vice President of Sales and Business Development
|
||
Chris
MacFarland
|
33
|
Director
|
||
Michael
G. O’Neil
|
62
|
Director
|
||
Don
Sledge
|
64
|
Director
|
Director
|
Audit
Committee
|
Compensation
Committee
|
Nominating
and Governance Committee
|
|||
Chris
MacFarland
|
X
|
X
|
Chair
|
|||
Michael
O’Neil
|
Chair
|
X
|
X
|
|||
Don
Sledge
|
X
|
Chair
|
X
|
Summary
Compensation Table
|
||||||||||||||||||||||
Annual
Compensation
|
Long
Term Compensation
|
|||||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary(1)
|
|
Paid
Bonus
|
Deferred
Bonus(2)
|
|
Total
Bonus
|
Securities
Underlying
Options
|
All
Other
Compensation
|
|||||||||||||
Jay
O. Wright (3)
|
2005
|
$
|
179,000
|
$
|
317,150
|
$
|
649,062
|
$
|
966,212
|
15,182,500
|
--
|
|||||||||||
Chief
Executive Officer and
|
2004
|
$
|
45,500
|
$
|
17,990
|
--
|
$
|
17,990
|
--
|
--
|
||||||||||||
President
|
2003
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Kurt
Gordon (4)
|
2005
|
$
|
174,000
|
$
|
297,150
|
$
|
649,062
|
$
|
946,212
|
--
|
--
|
|||||||||||
Chief
Financial Officer
|
2004
|
$
|
13,000
|
$
|
10,000
|
--
|
$
|
10,000
|
6,500,000
|
--
|
||||||||||||
2003
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||
Jack
W. Beech (5)
|
2005
|
$
|
145,360
|
$
|
25,708
|
$
|
99,292
|
$
|
125,000
|
--
|
--
|
|||||||||||
President,
DFW Internet Services, Inc.
|
2004
|
$
|
36,340
|
$
|
125,000
|
--
|
$
|
125,000
|
--
|
--
|
||||||||||||
2003
|
--
|
--
|
--
|
--
|
||||||||||||||||||
Geoffrey
B. Amend
(6)
|
2005
|
$
|
56,250
|
--
|
--
|
--
|
2,000,000
|
--
|
||||||||||||||
General
Counsel
|
2004
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
2003
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||
Tom
Mazerski (7)
|
2005
|
$
|
83,077
|
--
|
--
|
--
|
500,000
|
--
|
||||||||||||||
Chief
Executive Officer
|
2004
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Close
Call America, Inc.
|
2003
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Tammy
Martin (8)
|
2005
|
$
|
68,069
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||
Chief
Executive Officer
|
2004
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Davel
Communications, Inc.
|
2003
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
Bruce
Sanguinetti (9)
|
2005
|
$
|
45,000
|
--
|
--
|
--
|
3,000,000
|
--
|
||||||||||||||
Chief
Executive Officer and
|
2004
|
--
|
--
|
--
|
--
|
--
|
--
|
|||||||||||||||
President,
NeoReach, Inc.
|
2003
|
--
|
--
|
--
|
--
|
--
|
--
|
(1)
|
Mr.
Wright, Mr. Gordon and Mr. Beech, each joined our Company during
the
Fiscal Year ended March 31, 2004. Mr. Amend, Mr. Mazerski, Mr. Sanguinetti
and Ms. Martin, each joined our Company during the Fiscal Year ended
March
31, 2005. A description of each officer’s compensation package is provided
below.
|
(2)
|
Mr.
Wright and Mr. Gordon each agreed to defer $649,062 in bonus compensation
payable to each of them during the fiscal year ending March 31, 2005,
for
bonuses earned under the terms of their respective employment agreements.
Mr. Wright and Mr. Gordon were paid bonuses of $317,150 and $297,150,
respectively, during the fiscal year ending March 31,
2005.
|
(3)
|
Mr.
Jay O. Wright joined us in December 2003 as Chief Executive Officer.
Mr.
Wright was paid a base salary of $180,000 in calendar year 2004 and
was
eligible to receive a bonus equal to 1% of the revenues for the most
recent 12 month period of each acquisition made by the Company during
his
employment period. Mr. Wright also received warrants to purchase
15,182,500 shares of our common stock at an exercise price of $0.018
per
share upon the execution of his initial employment agreement. The
warrants
became exercisable as to 3,682,500 shares on April 15, 2004 and as
to an
additional 4,300,000 shares upon the Company achieving a market a
$25
million market cap for ten (10) consecutive trading days and a price
per
share of not less than $0.07, which has occurred. The remaining 7,200,000
shares began vesting ratably on May 15, 2004 in an amount of 300,000
shares on that date and each month thereafter until April 15, 2006.
Mr.
Wright also received $20,000 in connection with the warrants. Subsequent
to year-end March 31, 2005, Mr. Wright’s employment agreement was amended
to, among other things, extend his employment period to December
31, 2007.
Mr. Wright’s base salary has been increased to $210,000 for calendar year
2005, $240,000 for calendar year 2006 and $270,000 for calendar year
2007.
The terms of the new employment agreement eliminate the payment of
bonuses
as a result of the closing of an acquisition. Mr. Wright is now eligible
to receive up to $240,000 in bonuses tied to certain deliverables
and
profitability. In connection with the execution of the new employment
agreement, Mr. Wright also received additional warrants to purchase
5,000,000 shares of our common stock at an exercise price of $0.22
per
share, which warrants vest ratably from April 1, 2005 to December
31,
2007.
|
(4)
|
Mr.
Kurt Gordon joined us in February 2004 as Chief Financial Officer.
Mr.
Gordon was paid a base salary of $156,000 in calendar year 2004 and
was
eligible to receive a bonus equal to 1% of the revenues for the most
recent 12 month period of each acquisition made by the Company during
his
employment period. Mr. Gordon also received a warrant to purchase
up to
6,500,000 shares of common stock at an exercise price of $0.018 per
share
upon the execution of his employment agreement. The warrant became
exercisable as to 500,000 shares on March 1, 2004 and as to an additional
2,250,000 shares upon the Company achieving a market a $25 million
market
cap for ten (10) consecutive trading days and a price per share of
not
less than $0.07, which has occurred. The remaining 3,750,000 shares
began
vesting ratably on March 1, 2004 as to 156,250 shares and each month
thereafter until February 1, 2006. Effective April 1, 2005, Mr. Gordon’s
employment agreement was amended to, among other things, extend his
employment period to March 31, 2006. The terms of the new employment
agreement eliminate the payment of bonuses as a result of the closing
of
an acquisition. Mr. Gordon’s base salary was increased to $210,000 per
year. Mr. Gordon is eligible to receive $140,000 in bonuses tied
to
certain deliverables and profitability. In connection with the execution
of the new employment agreement, Mr. Gordon also received additional
warrants to purchase 1,500,000 shares of our common stock at an exercise
price of $0.22 per share, which warrants vest ratably from April
1, 2005
to March 31, 2006.
|
(5)
|
Mr.
Jack Beech joined us in January 2004 as President of our subsidiary
DFW
Internet Services, Inc. Mr. Beech’s services to our Company are provided
under the terms of a Consulting Agreement by and among the Company,
DFW
Internet Services, Inc., Beech Holdings, Inc. (“BHI”) and Mr. Beech.
Through BHI, Mr. Beech is paid a consulting fee of $145,360.65 and
is
eligible to additional fees of up to $125,000 annually for the first
three
years of BHI’s engagement by the Company. Mr. Beech is also eligible to
receive annual bonuses as the Board may determine from time to time.
BHI
was paid a $125,000 fee in January 2004 and $25,708 in January 2005.
BHI
agreed to a deferral of $99,292 in bonus compensation payable in
January
2005 under the terms of the above referenced Consulting
Agreement.
|
(6)
|
Mr.
Geoffrey B. Amend joined us in November 2004 as General Counsel.
Mr. Amend
is paid a base salary of $150,000 per year and is eligible to receive
a
bonus equal to 1.0% of the Company’s EBITDA for each fiscal year, but no
greater than $90,000 for any 12-month period. Mr. Amend also received
a
warrant to purchase up to 2,000,000 shares of our common stock, which
warrants are exercisable at price of $0.20 per share. The warrants
began
vesting ratably over twenty-four months on December 1, 2004. Subsequent
to
year end March 31, 2005, Mr. Amend’s employment agreement was amended to,
among other things, extend his employment period to March 31, 2007
and
increase his base salary to $180,000 per year. In
connection with the execution of the new employment agreement, Mr.
Amend
also received additional warrants to purchase 1,500,000 shares of
our
common stock at an exercise price of $0.15 per share. The warrants
vest
ratably from April 20, 2005 to March 31,
2007.
|
(7)
|
Mr.
Mazerski joined us in October 2004 as Chief Executive Officer of
our
subsidiary CloseCall America, Inc. Mr. Mazerski is paid a base salary
of
$180,000 per year and is eligible to receive a bonus equal to 2.5%
of
adjusted EBITDA from all Telco Operations. Mr. Mazerski also received
an
option to purchase up to 500,000 shares of common stock at an exercise
price of $0.20 per share. Those options were subsequently reclassified
as
warrants to purchase common stock. Two Hundred Fifty Thousand (250,000)
warrants to purchase our common stock vest ratably over the twenty-four
months following the execution of the Agreement and the remaining
warrants
vest upon Mobilepro’s Telco Operations reaching
$5,000,000 in Adjusted EBIDTA.
In April 2005, we granted Mr. Mazerski additional warrants to purchase
1,500,000 shares of our common stock at an exercise price of $0.15
per
share that vest ratably from April 20, 2005 to October 15,
2006.
|
(8)
|
Ms.
Martin joined us in November 2004 as General Counsel of our subsidiary
Davel Communications, Inc. Ms. Martin is paid a base salary of $186,295
per year and an annual car allowance of $8,400. In May 2005, Ms.
Martin
was promoted to Chief Executive Officer of Davel Communications,
Inc. Ms.
Martin also received warrants to purchase 1,500,000 shares of our
common
stock at an exercise price of $0.15 per share that vest ratably from
April
20, 2005 to March 31, 2006.
|
(9)
|
Mr.
Sanguinetti joined us in January 2005 as President and Chief Executive
Officer of our subsidiary NeoReach, Inc. Mr. Sanguinetti is paid
a base
salary of $180,000 per year and is eligible to receive a bonus on
terms
and conditions to be mutually agreed upon by Mr. Sanguinetti and
the
Company. Such annual bonus will be targeted to achieve between 25%
and
150% of Mr. Sanguinetti’s base salary. Mr. Sanguinetti also received a
warrant to purchase up to 3,000,000 shares of common stock at an
exercise
price of $0.16 per share. The warrants vest ratably over the initial
twelve months of his employment.
|
Name
|
Number
of
Securities
Underlying
Options/SARs
Granted
|
Percent
of Total Options/SARs
Granted
to
Employees
In
Fiscal
Year
|
Exercise
of
Base
Price
($/Sh)
|
|
Expiration
Date
|
||||||||
Jay
O. Wright (1)
|
15,182,500
|
53.6
|
%
|
$
|
0.018
|
4/15/14
|
|||||||
Kurt
Gordon
|
0
|
N/A
|
N/A
|
N/A
|
|||||||||
Jack
W. Beech
|
0
|
N/A
|
N/A
|
N/A
|
|||||||||
Geoffrey
Amend (1)
|
2,000,000
|
7.1
|
%
|
$
|
0.20
|
11/1/14
|
|||||||
John
Dumbleton (1)
|
2,000,000
|
7.1
|
%
|
$
|
0.17
|
1/17/15
|
|||||||
Tom
Mazerski (1)
|
500,000
|
1.8
|
%
|
$
|
0.225
|
10/18/14
|
|||||||
Tammy
Martin
|
0
|
N/A
|
N/A
|
N/A
|
|||||||||
Bruce
Sanguinetti (1)
|
3,000,000
|
10.6
|
%
|
$
|
0.16
|
1/1/15
|
Name
|
Number
of
Shares
Acquired
on
Exercise
|
Value
Realized
|
Number
of Securities
Underlying
Unexercised
Options
at
March
31, 2005(1)
Exercisable/Unexercisable
|
Value
of Unexercised
In-the-Money
Options at
March
31, 2005(1)
Exercisable/Unexercisable
|
|||||||||
Jay
O. Wright
|
0
|
$
|
0
|
11,282,500
/ 3,900,000
|
$
|
1,714,940
/ 592,800
|
|||||||
Kurt
Gordon
|
0
|
$
|
0
|
4,625,000
/ 1,875,000
|
$
|
703,000
/ 285,000
|
|||||||
Jack
W. Beech
|
0
|
$
|
0
|
0
/ 0
|
$
|
0
/ 0
|
|||||||
Geoffrey
B. Amend
|
0
|
$
|
0
|
208,333
/ 1,791,667
|
$
|
0
/ 0
|
|||||||
John
Dumbleton
|
0
|
$
|
0
|
666,666
/ 1,333,334
|
$
|
0
/ 0
|
|||||||
Tom
Mazerski
|
0
|
$
|
0
|
52,083
/ 447,917
|
$
|
0
/ 0
|
|||||||
Tammy
Martin
|
0
|
$
|
0
|
0
/ 0
|
$
|
0
/ 0
|
|||||||
Bruce
Sanguinetti
|
0
|
$
|
0
|
750,000
/ 2,250,000
|
$
|
7,500
/ 22,500
|
(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.
|
Shares
|
||||||
Beneficially
|
Percent
|
|||||
Name
and Address
|
Title
of Class
|
Owned
(1)
|
of
Class(1)
|
|||
Daniel
Lozinsky
c/o
Mobilepro Corp.
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
22,083,122
|
6.1%
|
|||
Jay
O. Wright
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
13,088,561
|
3.6%
|
|||
Kurt
Gordon
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
5,250,000
|
1.5%
|
|||
Geoffrey
B. Amend
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
570,652
|
*
|
|||
John
Dumbleton
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
1,000,000
|
*
|
|||
Jack
W. Beech
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
9,308,863
|
2.6%
|
|||
Tom
Mazerski
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
2,392,202
|
*
|
|||
Tammy
Martin
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
343,750
|
*
|
|||
Bruce
Sanguinetti
6701
Democracy Blvd., Suite 300
Bethesda,
MD 20817
|
Common
|
1,750,000
|
*
|
|||
Officers
and Directors as a Group
(8
Persons)
|
Common
|
36,096,230
|
10.0%
|
*
|
Less
than 1%.
|
(1)
|
Applicable
percentage of ownership is based on 361,018,011 shares of common
stock
outstanding as of May 27, 2005, together with applicable options
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 that are currently exercisable or exercisable
within 60 days of May 27, 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.
|
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.
|
||
Exhibit
No.
|
Description
|
Location
|
||
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.
|
||
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.
|
Exhibit
No.
|
Description
|
Location
|
||
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 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.
|
||
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
|
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.
|
||
10.3
|
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.
|
||
10.4
|
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.
|
||
10.5
|
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.
|
Exhibit
No.
|
Description
|
Location
|
||
10.6
|
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.
|
||
10.7
|
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.
|
||
10.8
|
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.
|
||
10.9
|
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.
|
||
10.10
|
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.
|
||
10.11
|
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.
|
||
10.12
|
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.
|
||
10.13
|
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.
|
||
10.14
|
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.
|
||
10.15
|
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.
|
||
10.16
|
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.
|
||
10.17
|
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.
|
||
10.18
|
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.
|
Exhibit
No.
|
Description
|
Location
|
||
10.19
|
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.
|
||
10.20
|
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.
|
||
10.21
|
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.
|
||
10.22
|
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.
|
||
10.23
|
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.
|
||
10.24
|
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.
|
||
10.25
|
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.
|
||
10.26
|
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.
|
||
10.27
|
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.
|
||
10.28
|
Employment
Agreement dated February 28, 2005 between Davel Communications, Inc.
and
Tammy L. Martin
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.29
|
Amendment
No. 1 to Employment Agreement between Davel Communications, Inc.
and Tammy
L. Martin, dated April 20, 2005
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.30
|
Amendment
No. 2 to Employment Agreement between Davel Communications, Inc.
and Tammy
L. Martin, dated May 26, 2005
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.31
|
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.
|
Exhibit
No.
|
Description
|
Location
|
||
10.32
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
between
Kurt Gordon and the Company
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.33
|
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 Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.34
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005,
between
Geoffrey Amend and the Company
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.35
|
Securities
Purchase Agreement, dated as of May 13, 2005, by and between the
Company
and Cornell Capital
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.36
|
Secured
Convertible Debenture, issued on May 13, 2005 by the Company to Cornell
Capital
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.37
|
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 Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.38
|
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 Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.39
|
Investor
Registration Rights Agreement, dated as of May 13, 2005 by and between
the
Company and Cornell Capital
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.40
|
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 Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
10.41
|
Warrant
issued by the Company to Cornell Capital
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
20.1
|
Letter
from Jay O. Wright, President and Chief Executive Officer of the
Company
to the Stockholders, dated June 9, 2004
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on June 15, 2004.
|
||
20.2
|
Letter
from Jay O. Wright, President and Chief Executive Officer of the
Company
to the Stockholders, dated September 30, 2004
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on October 4, 2004.
|
||
20.3
|
Letter
from Jay O. Wright, President and Chief Executive Officer of the
Company
to the Stockholders, dated December 17, 2004
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
Exhibit
No.
|
Description
|
Location
|
||
20.4
|
Letter
from Jay O. Wright, President and Chief Executive Officer of the
Company
to the Stockholders, dated April 21, 2005
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on April 26, 2005.
|
||
21.1
|
Subsidiaries
of Registrant
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
31.1
|
Certification
by Jay O. Wright, Chief Executive Officer, pursuant to Rule
13a-14(a)
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
31.2
|
Certification
by Kurt Gordon, Chief Financial Officer, pursuant to Rule
13a-14(a)
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
32.1
|
Certification
by Jay O. Wright and Kurt Gordon, pursuant to 18 U.S.C. Section 1350,
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002**
|
Incorporated
by reference to Registrant's Annual Report on Form 10-KSB filed
on June 28, 2005.
|
||
2005
|
2004
|
||||||
Audit
Fees
|
$
|
32,500
|
$
|
25,237.50
|
|||
Audit
Related Fees
|
$
|
0
|
$
|
0
|
|||
Tax
Fees
|
$
|
2,000
|
$
|
2,000
|
|||
All
Other Fees
|
$
|
110,000
|
$
|
18,000
|
Mobilepro
Corp.
|
||||||
By
|
/s/ Jay O. Wright | |||||
Name: Jay
O. Wright
|
||||||
Title: Chief
Executive Officer,
|
||||||
Date: May
10, 2006
|
SIGNATURE
|
TITLE
|
DATE
|
|
/s/
Jay O. Wright
|
Chief
Executive Officer,
|
May
10, 2006
|
|
Jay
O. Wright
|
Principal
Executive Officer and Director
|
||
/s/
Richard H. Deily
|
Principal
Financial and Principal Accounting Officer
|
May
10, 2006
|
|
Richard
H. Deily
|
|||
/s/
Jack W. Beech
|
Director
|
May
10, 2006
|
|
Jack
W. Beech
|
|||
/s/
Chris MacFarland
|
Director
|
May
10, 2006
|
|
Chris
MacFarland
|
|||
/s/
Michael O’Neil
|
Director
|
May
10, 2006
|
|
Michael
O’Neil
|
|||
/s/
Jerry M. Sullivan, Jr.
|
President,
Chief Operating Officer, and Director
|
May
10, 2006
|
|
Jerry
M. Sullivan, Jr.
|
|||
/s/
Don Sledge
|
Director
|
May
10, 2006
|
|
Don
Sledge
|
|||