SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of
Report:
June
30,
2006
MOBILEPRO
CORP.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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000-51010
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87-0419571
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(State
of Incorporation)
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(Commission
File Number )
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(IRS
Employer Identification No.)
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6701
Democracy Blvd., Suite 202
Bethesda,
MD 20817
(Address
of principal executive offices) (Zip Code)
(301)
315-9040
(Registrant's
telephone number)
Check
the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the
filing obligation of the registrant under any of the following provisions
(see
General
Instruction A.2 below):
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
On
June
30, 2006, Mobilepro Corp. (“Mobilepro”) entered into an amended 7.75% secured
convertible debenture in the amount of $15,149,650 (the “Debenture”) with
Cornell Capital Partners, LP (“Cornell Capital”). The Debenture amended the
7.75% convertible debenture in the principal amount of $15,500,000 dated May
13,
2005 issued by Mobilepro to Cornell Capital. Under the revised terms of the
Debenture, Mobilepro has agreed to make weekly scheduled principal payments
of
at least $250,000 commencing September 1, 2006 with interest on the outstanding
principal balance payable at the same time. Mobilepro has the right to make
any
and all such payments by issuing shares of its common stock to Cornell Capital
with the amount of such shares based upon the lower of $0.275 per share or
93%
of the average of the two lowest daily volume weighted average prices of
Mobilepro’s common stock during the five days immediately following the
scheduled payment date. Cornell Capital may convert all or any part of the
unpaid principal and accrued interest owed under the Debenture into shares
of
Mobilepro common stock at a conversion price of $0.275 per share. The Debenture
is secured by a blanket lien on Mobielpro’s assets.
Mobilepro
has a right to redeem all or a portion of the outstanding amounts owed under
the
Debenture. If Mobilepro’s common stock is trading at or above $0.275 then
Mobilepro must pay an amount equal to the principal being repaid plus a
redemption premium equal to 20% of the principal amount being redeemed and
accrued interest. Mobilepro must also issue to Cornell Capital a warrant to
purchase an amount of shares of Mobilepro common stock equal to one-third of
the
principal amount redeemed divided by $0.275. The warrant has “piggyback”
registration rights and is exercisable for the shorter of five years or 18
months after the underlying shares are registered for sale under the Securities
Act of 1933, as amended. If Mobilepro’s common stock is trading below $0.275 per
share then Mobilepro must pay either a redemption premium of 10% of the
principal amount and accrued interest redeemed or issue a warrant with the
same
terms as described above for redemption when Mobilepro’s price per share of
common stock is equal or greater than $0.275, at Cornell Capital’s election.
As
of May
31, 2006, Cornell Capital held 8,776,388 issued and outstanding shares of
Mobilepro’s common stock and is deemed, pursuant to SEC Rule 13d-3, to
beneficially own 22,123,612 shares of Mobilepro’s common stock that includes
6,000,000 shares of common
stock
issuable
upon the exercise of a warrant to purchase our common stock and 16,123,612
shares of our
common
stock issuable upon the conversion of the 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% of Mobilepro’s common stock.
The
terms
of the Debenture described above are only a summary of the Debenture terms
and
are qualified in their entirety by reference to the Debenture which is attached
hereto as Exhibit 10.1 and incorporated by reference into this Current Report
on
Form 8-K.
Item
9.01
Financial Statements and Exhibits
(d)
Exhibits
10.1
7.75% Secured Convertible Debenture dated June 30, 2006 issued by Mobilepro
Corp. to Cornell Capital Partners, LP
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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By:
/s/
Jay O. Wright |
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Jay
O. Wright |
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Chief
Executive Officer
MOBILEPRO
CORP.
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Date:
July 7, 2006