Delaware
|
3570
|
87-0419571
|
|
(State
or Other Jurisdiction of
Incorporation
or Organization
|
(Primary
Standard
Industrial
|
(I.R.S.
Employer Identification No.)
|
|
Classification
Code
Number)
|
|
|
|
|
|
|
|
6701
Democracy Boulevard
|
|
Jay
O. Wright, Chief Executive Officer
|
|
Suite
202
|
Mobilepro
Corp.
|
||
Bethesda,
Maryland 20817
|
|
6701
Democracy Boulevard, Suite 202
|
|
|
Bethesda,
Maryland 20817
|
|
|
(301)
315-9040
|
|
(301)
315-9040
|
|
(Address
and Telephone Number of Principal Executive Offices and
|
|
(Name,
Address and Telephone Number of Agent for Service)
|
|
Principal
Place of Business)
|
|
|
Copy
to:
Ernest
M. Stern, Esq.
Seyfarth
Shaw LLP
815
Connecticut Avenue, N.W., Suite 500
Washington,
D.C. 20006-4004
(202)
828-5360
Fax
No.: (202) 828-5393
|
|
CALCULATION
OF REGISTRATION FEE
|
|
|||||||||
Title
Of Each Class Of
Securities
To Be Registered
|
Amount
To Be
Registered
|
Proposed
Maximum
Offering
Price Per
Share (1)
|
Proposed
Maximum
Aggregate
Offering
Price
(1)
|
Amount
Of
Registration
Fee
|
|
|||||
Common
stock, par value $0.001 per share
|
123,732,939
|
Shares
|
$0.262
|
$32,418,030
|
$3,815.60
|
|
||||
Common
stock, par value $0.001 per share
|
115,119,806
|
Shares
|
$0.133
|
$15,310,934
|
$1,802.10
|
(1)
|
Estimated
solely for the purpose of calculating the registration fee pursuant
to
Rule 457(c) under the Securities Act of 1933. For purposes of this
table,
we have used the closing prices of our common stock on September
27, 2005
and August 10, 2006 which were $0.262 per share and $0.133 per share,
respectively.
|
|
SUMMARY
OF THE COMPANY
|
1 |
|
THE
OFFERING
|
5 |
|
SUMMARY
FINANCIAL INFORMATION
|
6 |
|
RISK
FACTORS
|
9 |
|
SELLING
STOCKHOLDERS
|
21 |
|
FORWARD-LOOKING
STATEMENTS
|
22 |
|
DESCRIPTION
OF BUSINESS
|
22 |
|
DESCRIPTION
OF PROPERTY
|
51 |
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
|
53 |
|
MANAGEMENT
|
71 |
|
LEGAL
PROCEEDINGS
|
82 |
|
PRINCIPAL
STOCKHOLDERS
|
84 |
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
|
85 |
|
MARKET
PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND OTHER
STOCKHOLDER MATTERS
|
86 |
|
DESCRIPTION
OF SECURITIES
|
86 |
|
EXPERTS
|
88 |
|
LEGAL
MATTERS
|
88 |
|
AVAILABLE
INFORMATION
|
88 |
|
FINANCIAL
STATEMENTS
|
88 |
|
Wireless
Networks
|
Our
broadband wireless network deployment efforts are being conducted
by our
wholly owned subsidiary, NeoReach, Inc., (“NeoReach”), and its subsidiary,
Kite Networks, Inc. (“Kite Networks,” formerly, NeoReach Wireless, Inc.).
This segment also includes the operations of Kite Broadband, LLC
(“Kite
Broadband”), 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 local telephone companies
which
compete with 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, 1-800-CloseCall anytime/anywhere calling, digital
wireless,
high-speed telephone (voice over IP), and dial-up and DSL Internet
services. AFN is licensed to provide local access, long distance
and/or
Internet services throughout the United States. Davel is one of
the
largest independent payphone operators in the United
States.
|
Internet Services
|
Our
Internet services segment is led by DFW Internet Services, Inc.
(“DFW”,
doing business as Nationwide Internet), an Internet services provider
(“ISP”) based in Irving, Texas, its acquired Internet service provider
subsidiaries and InReach Internet, Inc. (“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.
|
|
|
|
|
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.
|
Business
Segment
|
2006
|
2005
|
|||||
|
|
|
|||||
Voice
Services
|
$
|
72,356,453
|
$
|
32,009,084
|
|||
Internet
Services
|
16,940,513
|
13,884,060
|
|||||
Wireless
Networks
|
9,716,501
|
-
|
|||||
Corporate
|
-
|
615,000
|
|||||
Total
Revenues
|
$
|
99,013,467
|
$
|
46,508,144
|
Business
Segment
|
|
2006
|
2005
|
|||||||
|
|
|
|
|||||||
Voice
Services
|
|
73.1
|
%
|
68.8
|
%
|
|||||
Internet
Services
|
17.1
|
29.9
|
||||||||
Wireless
Networks
|
9.8
|
-
|
||||||||
Corporate
|
-
|
1.3
|
||||||||
Total
Revenues
|
|
100.0
|
%
|
100.0
|
%
|
Business
Segment
|
2006
|
2005
|
|||||
|
|
|
|||||
Voice
Services
|
$
|
16,084,041
|
$
|
18,462,451
|
|||
Internet
Services
|
4,220,433
|
4,037,400
|
|||||
Wireless
Networks
|
3,038,312
|
5,994
|
|||||
Corporate
|
-
|
-
|
|||||
Total
Revenues
|
$
|
23,342,786
|
$
|
22,505,845
|
Business
Segment
|
|
2006
|
2005
|
|||||||
|
|
|
|
|||||||
Voice
Services
|
|
68.9
|
%
|
82.0
|
%
|
|||||
Internet
Services
|
18.1
|
18.0
|
||||||||
Wireless
Networks
|
13.0
|
-
|
||||||||
Corporate
|
-
|
-
|
||||||||
Total
Revenues
|
|
100.0
|
%
|
100.0
|
%
|
·
|
The
holders of 90,000,000 shares of common stock that were issued to
the
former minority-interest owners of Kite Broadband and the stockholders
of
Kite Networks, Inc. in connection with our acquisition of those
companies.
|
·
|
Cornell
Capital Partners, L.P. that holds a debenture that is convertible
into a
minimum of 55,089,635 shares of our common stock and warrants to
purchase
up to 16,000,000 shares of our common
stock.
|
·
|
The
holder of 10,000,000 shares of common stock that were issued to the
former
owner in connection with our acquisition of AFN.
|
|
·
|
Certain
holders of warrants to purchase collectively up to 5,600,000 shares
of our
common stock that were issued in connection with the bridge financing
of
our acquisition of Davel.
|
|
·
|
Certain
holders of warrants to purchase collectively up to 5,000,000 shares
of our
common stock that were issued to the former owners in connection
with our
acquisition of Davel.
|
|
·
|
Certain
holders of warrants to purchase collectively up to 3,223,625 shares
of our
common stock that were issued to the former owners in connection
with our
acquisition of CloseCall.
|
|
·
|
Certain
holders of 1,307,870 shares of our common stock that were issued
to the
former stockholders upon the conversion of convertible promissory
notes
obtained in connection with the acquisition of The River Internet
Access
Co.
|
|
·
|
The
holder of a warrant to purchase up to 600,000 shares of our common
stock
that were issued to a former owner in connection with our acquisition
of
Evergreen Open Broadband Corporation.
|
|
·
|
Certain
holders of warrants and options to purchase an aggregate
of 52,031,615 shares of our common stock that were issued to current
and former employees, consultants, advisors and directors.
|
|
Common
Stock Offered
|
|
238,852,745
shares of our common stock by selling stockholders (the number of
shares
being registered in this offering will represent approximately 32.92%
of
the total number of shares of common stock outstanding upon their
issuance).
|
|
|
|
|
|
Offering
Price
|
|
Market
price.
|
|
|
|
|
|
Common
Stock Outstanding
|
|
588,888,574 shares
(before the offering).
|
|
|
|
|
|
Use
of Proceeds
|
|
Although
we will receive proceeds in connection with the exercise of outstanding
options and warrants to purchase shares of our common stock that
are being
registered herein, we will not receive any proceeds from the sale
of the
shares offered by the selling stockholders.
|
|
|
|
|
|
Risk
Factors
|
|
The
securities offered hereby involve a high degree of risk and immediate
substantial dilution. See “Risk Factors”.
|
|
|
|
|
|
Over-the-Counter
Bulletin Board Symbol
|
|
MOBL
|
|
|
For
the
Year
Ended
March
31, 2005
|
For
the
Year
Ended
March
31, 2006
|
For
the Three
Months
Ended
June
30, 2005
|
For
the Three
Months
Ended
June
30, 2006
|
|||||||||
Statement
of Operations Data:
|
|
|
|
|
|||||||||
|
|
|
|
|
|||||||||
Revenues
|
$
|
46,508,144
|
$
|
99,013,467
|
$
|
22.505,845
|
$
|
23,342,786
|
|||||
Operating
Costs and Expenses
|
50,029,303
|
106,238,075
|
21,154,479
|
27,276,617
|
|||||||||
|
|||||||||||||
Operating
Income/(Loss)
|
(3,521,159
|
)
|
(7,224,608
|
)
|
1,351,366
|
(3,933,831
|
)
|
||||||
Interest
Expense, net
|
(1,838,563
|
)
|
(2,838,394
|
)
|
(932,175
|
)
|
(394,075
|
)
|
|||||
Loss
on Extinguishment of Debt
|
-
|
-
|
-
|
(409,601
|
|||||||||
Minority
Interests
|
-
|
(113,405
|
-
|
-
|
|||||||||
|
|||||||||||||
Net
Income/(Loss) Applicable to Common Shares
|
$
|
(5,359,722
|
)
|
$
|
(10,176,407
|
)
|
$
|
419,191
|
$
|
(4,737,507
|
)
|
||
|
|||||||||||||
Net
Income/(Loss) Per Share
|
|||||||||||||
Basic
|
$
|
(0.0185
|
)
|
$
|
(0.0248
|
)
|
$
|
0.0012
|
$
|
(0.0082
|
)
|
||
Diluted
|
$
|
(0.0185
|
)
|
$
|
(0.0248
|
)
|
$
|
0.0010
|
$
|
(0.0082
|
)
|
|
March
31,
2005
|
March
31,
2006
|
June
30,
2006
|
|||||||
Balance
Sheet Data:
|
|
|
|
|||||||
|
|
|
||||||||
Assets
|
|
|
|
|||||||
Cash
and Cash Equivalents
|
$
|
4,669,787
|
$
|
5,397,881
|
$
|
4,398,979
|
||||
|
||||||||||
Total
Current Assets
|
$
|
20,269,751
|
$
|
19,631,577
|
$
|
17,743,562
|
||||
Total
Non-Current Assets
|
52,553,180
|
74,359,476
|
76,465,281
|
|||||||
|
||||||||||
Total
Assets
|
$
|
72,822,931
|
$
|
93,991,053
|
$
|
94,208,843
|
||||
|
||||||||||
Liabilities
and Stockholders Equity
|
||||||||||
Total
Current Liabilities
|
$
|
48,869,082
|
$
|
30,516,184
|
$
|
32,930,416
|
||||
Total
Long-Term Liabilities
|
999,196
|
10,645,662
|
5,693,834
|
|||||||
|
||||||||||
Total
Liabilities (1)
|
49,868,278
|
41,161,846
|
38,624,250
|
|||||||
Minority
Interests
|
600,000
|
-
|
-
|
|||||||
Total
Stockholders’ Equity
|
22,354,653
|
52,829,207
|
55,584,593
|
|||||||
|
||||||||||
Total
Liabilities and Stockholders’ Equity
|
$
|
72,822,931
|
$
|
93,991,053
|
$
|
94,208,843
|
·
|
|
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;
|
|
·
|
|
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.
|
|
·
|
our
success in withstanding the continued shift from dial-up ISP service
to
broadband ISP service;
|
|
|
|
|
·
|
the
performance of our products, services and technology in a manner
that
meets customer expectations;
|
|
|
|
|
·
|
the
success of our efforts to develop effective channels of distribution
for
our products;
|
|
|
|
|
·
|
our
ability to price our products that are of a quality and at a price
point
that is competitive with similar or comparable products offered by
our
competitors;
|
|
|
|
|
·
|
the
success of our efforts to develop, improve and satisfactorily address
any
issues relating to our technology;
|
|
|
|
|
·
|
our
ability to effectively compete with companies that have substantially
greater market presence and financial, technical, marketing and other
resources than us including (i) local ISPs, (ii) national and regional
ISPs, (iii) established online services; (iv) nonprofit or educational
ISPs; (v) national telecommunications companies; (vi) Regional Bell
Operating Companies (“RBOCs”); (vii) competitive local exchange carriers;
and (viii) cable operators;
|
|
|
|
|
·
|
our
ability to adapt to the consolidation of existing ISPs with or into
larger
entities, or entry of new entities into the Internet services market,
would likely result in greater competition for the Company;
|
|
|
|
|
·
|
our
ability to collect dial around compensation owed to our pay telephone
business from third party payors; and
|
|
|
|
|
·
|
the
continued erosion of coin revenues in our pay telephone business
resulting
from the penetration of wireless technologies and prepaid calling
cards.
|
|
·
|
It
is traded at a price of less than $5.00 per share;
|
|
|
|
|
·
|
It
is not traded on a “recognized” national exchange;
|
|
|
|
|
·
|
Its
price is not quoted on the Nasdaq automated quotation system
(Nasdaq-listed stock must still have a price of not less than $5.00
per
share); or
|
|
|
|
|
·
|
Its
issuer has net tangible assets less than $2.0 million (if the issuer
has
been in continuous operation for at least three years) or $5.0 million
(if
in continuous operation for less than three years), or has average
annual
revenues of less than $6.0 million for the last three years.
|
|
Selling
Stockholder
|
Non-Contingent
Shares Beneficially Owned Before Offering
|
Contingent
Shares Beneficially Owned Before Offering
|
Total
Shares Beneficially Owned Before Offering
|
Percentage
of Outstanding Shares Beneficially Owned Before Offering
(1)
|
Contingent
Shares Not Considered Beneficially Owned
|
Shares
to be Sold in the Offering
|
|
Percentage
of Outstanding Shares Beneficially Owned After Offering
(1)
|
|||||||||||||||||||||||
The
Bethell Family Trust
|
10,000,000
|
-
|
10,000,000
|
1.70
|
%
|
-
|
10,000,000
|
(2
|
)
|
0.00
|
%
|
||||||||||||||||||||
Tom
Millitzer
|
7,026
|
-
|
7,026
|
0.00
|
%
|
-
|
7,026
|
0.00
|
%
|
||||||||||||||||||||||
Paul
Halvorsen
|
14,638
|
-
|
14,638
|
0.00
|
%
|
-
|
14,638
|
0.00
|
%
|
||||||||||||||||||||||
Estate
of Roger L. Beck, Jr.
|
587,471
|
-
|
587,471
|
0.10
|
%
|
-
|
587,471
|
0.00
|
%
|
||||||||||||||||||||||
Jared
B. Reimer
|
153,156
|
-
|
153,156
|
0.03
|
%
|
-
|
153,156
|
0.00
|
%
|
||||||||||||||||||||||
Dr.
Ronald Reimer
|
72,456
|
-
|
72,456
|
0.01
|
%
|
-
|
72,456
|
0.00
|
%
|
||||||||||||||||||||||
Pankaj
Sharma
|
72,456
|
-
|
72,456
|
0.01
|
%
|
-
|
72,456
|
0.00
|
%
|
||||||||||||||||||||||
Kim
DeWitt
|
42,215
|
-
|
42,215
|
0.01
|
%
|
-
|
42,215
|
0.00
|
%
|
||||||||||||||||||||||
Robert
Doggett
|
351,133
|
-
|
351,133
|
0.06
|
%
|
-
|
351,133
|
0.00
|
%
|
||||||||||||||||||||||
Dr.
Bhagwab Swaroop Misra
|
7,319
|
-
|
7,319
|
0.00
|
%
|
-
|
7,319
|
0.00
|
%
|
||||||||||||||||||||||
Subtotal
|
1,307,870
|
-
|
1,307,870
|
0.22
|
%
|
-
|
1,307,870
|
(4
|
)
|
0.00
|
%
|
||||||||||||||||||||
Cornell
Capital Partners, L.P.
|
6,450,000
|
24,150,000
|
30,600,000
|
(5
|
)
|
4.99
|
%
|
46,939,635
|
(5
|
)
|
71,089,635
|
(5
|
)
|
0.98
|
%
|
||||||||||||||||
-
|
|||||||||||||||||||||||||||||||
Airlie
Master Opportunity Fund, Ltd.
|
-
|
1,866,666
|
1,866,666
|
0.32
|
%
|
-
|
1,866,666
|
0.00
|
%
|
||||||||||||||||||||||
Richard
Berritt
|
-
|
1,866,667
|
1,866,667
|
0.32
|
%
|
-
|
1,866,667
|
0.00
|
%
|
||||||||||||||||||||||
Jonathan
Heine
|
-
|
1,866,667
|
1,866,667
|
0.32
|
%
|
-
|
1,866,667
|
0.00
|
%
|
||||||||||||||||||||||
Subtotal
|
-
|
5,600,000
|
5,600,000
|
0.94
|
%
|
-
|
5,600,000
|
(6
|
)
|
0.00
|
%
|
||||||||||||||||||||
ABLECO
Finance, LLC
|
-
|
456,250
|
456,250
|
0.08
|
%
|
-
|
456,250
|
(7
|
)
|
0.00
|
%
|
||||||||||||||||||||
ARK-CLO
2000-1
|
-
|
447,303
|
447,303
|
0.08
|
%
|
-
|
447,303
|
(8
|
)
|
0.00
|
%
|
||||||||||||||||||||
Avenue
Special Situations Fund II, LP
|
-
|
118,386
|
118,386
|
0.02
|
%
|
-
|
118,386
|
(9
|
)
|
0.00
|
%
|
||||||||||||||||||||
BNP
Paribas
|
-
|
208,727
|
208,727
|
0.04
|
%
|
-
|
208,727
|
(10
|
)
|
0.00
|
%
|
||||||||||||||||||||
Cerberus
Partners, L.P.
|
-
|
1,884,475
|
1,884,475
|
0.32
|
%
|
-
|
1,884,475
|
(11
|
)
|
0.00
|
%
|
||||||||||||||||||||
Foothill
Partners III, L.P.
|
-
|
684,375
|
684,375
|
0.12
|
%
|
-
|
684,375
|
(12
|
)
|
0.00
|
%
|
||||||||||||||||||||
Morgan
Stanley Prime Income Trust
|
-
|
98,655
|
98,655
|
0.02
|
%
|
-
|
98,655
|
(13
|
)
|
0.00
|
%
|
||||||||||||||||||||
PNC
Bank N.A.
|
-
|
208,727
|
208,727
|
0.04
|
%
|
-
|
208,727
|
(14
|
)
|
0.00
|
%
|
||||||||||||||||||||
US
Bank, N.A.
|
-
|
208,727
|
208,727
|
0.04
|
%
|
-
|
208,727
|
(15
|
)
|
0.00
|
%
|
||||||||||||||||||||
Wells
Fargo Foothill, Inc.
|
-
|
684,375
|
684,375
|
0.12
|
%
|
-
|
684,375
|
(16
|
)
|
0.00
|
%
|
||||||||||||||||||||
Subtotal
|
-
|
5,000,000
|
5,000,000
|
0.84
|
%
|
-
|
5,000,000
|
(17
|
)
|
0.00
|
%
|
||||||||||||||||||||
Peter
Aquino
|
-
|
300
|
300
|
0.00
|
%
|
-
|
300
|
0.00
|
%
|
||||||||||||||||||||||
Alexander
Enterprise Holdings
|
-
|
101,455
|
101,455
|
0.02
|
%
|
-
|
101,455
|
0.00
|
%
|
||||||||||||||||||||||
Daniel
P. Behuniak
|
-
|
20,291
|
20,291
|
0.00
|
%
|
-
|
20,291
|
0.00
|
%
|
||||||||||||||||||||||
Yakob
Ben-Shlomo
|
-
|
4,870
|
4,870
|
0.00
|
%
|
-
|
4,870
|
0.00
|
%
|
||||||||||||||||||||||
Brent
& Patrice Clapacs Family Trust
|
49,587
|
4,339
|
53,926
|
0.01
|
%
|
-
|
4,339
|
0.01
|
%
|
||||||||||||||||||||||
Tiffany
Brown
|
6,224
|
545
|
6,769
|
0.00
|
%
|
-
|
545
|
0.00
|
%
|
||||||||||||||||||||||
Adrian
Catalano
|
55,655
|
4,870
|
60,525
|
0.01
|
%
|
-
|
4,870
|
0.01
|
%
|
||||||||||||||||||||||
Diane
Clarence
|
12,388
|
1,084
|
13,472
|
0.00
|
%
|
-
|
1,084
|
0.00
|
%
|
||||||||||||||||||||||
George
F. Conniff
|
46,379
|
4,058
|
50,437
|
0.01
|
%
|
-
|
4,058
|
0.01
|
%
|
||||||||||||||||||||||
William
Cortez
|
47,307
|
4,139
|
51,446
|
0.01
|
%
|
-
|
4,139
|
0.01
|
%
|
||||||||||||||||||||||
William
P. Dioguardi
|
127,542
|
55,800
|
183,342
|
0.03
|
%
|
-
|
55,800
|
0.02
|
%
|
||||||||||||||||||||||
Drax
Holdings LP
|
-
|
101,455
|
101,455
|
0.02
|
%
|
-
|
101,455
|
0.00
|
%
|
||||||||||||||||||||||
Chris
Drazdys
|
-
|
9,188
|
9,188
|
0.00
|
%
|
-
|
9,188
|
0.00
|
%
|
||||||||||||||||||||||
Val
Drazdys
|
37,850
|
3,312
|
41,162
|
0.01
|
%
|
-
|
3,312
|
0.01
|
%
|
||||||||||||||||||||||
Natasha
Ervin
|
2,619
|
229
|
2,848
|
0.00
|
%
|
-
|
229
|
0.00
|
%
|
||||||||||||||||||||||
Donald
F. Farley
|
69,569
|
6,087
|
75,656
|
0.01
|
%
|
-
|
6,087
|
0.01
|
%
|
||||||||||||||||||||||
Mohinder
Goswami
|
231,897
|
20,291
|
252,188
|
0.04
|
%
|
-
|
20,291
|
0.04
|
%
|
||||||||||||||||||||||
Mary
Guerra
|
111,310
|
9,740
|
121,050
|
0.02
|
%
|
-
|
9,740
|
0.02
|
%
|
||||||||||||||||||||||
Peter
Habib
|
48,698
|
4,261
|
52,959
|
0.01
|
%
|
-
|
4,261
|
0.01
|
%
|
||||||||||||||||||||||
Raja
B. Hannush
|
27,828
|
2,435
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.00
|
%
|
||||||||||||||||||||||
Health
Care Professionals, Inc.
|
1,391,378
|
121,746
|
1,513,124
|
0.26
|
%
|
121,746
|
0.24
|
%
|
|||||||||||||||||||||||
David
Hoachman
|
104,353
|
9,131
|
113,484
|
0.02
|
%
|
-
|
9,131
|
0.02
|
%
|
||||||||||||||||||||||
Jimayne
Howser
|
6,840
|
599
|
7,439
|
0.00
|
%
|
-
|
599
|
0.00
|
%
|
||||||||||||||||||||||
Lawrence
R. Hyman
|
27,828
|
2,435
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.00
|
%
|
||||||||||||||||||||||
Lawrence
R. and Lois Hyman as TBE
|
278,276
|
24,349
|
302,625
|
0.05
|
%
|
-
|
24,349
|
0.05
|
%
|
||||||||||||||||||||||
Ammar
Kawash
|
139,090
|
12,170
|
151,260
|
0.03
|
%
|
-
|
12,170
|
0.02
|
%
|
||||||||||||||||||||||
Timothy
Keating
|
-
|
8,899
|
8,899
|
0.00
|
%
|
-
|
8,899
|
0.00
|
%
|
||||||||||||||||||||||
Allen
H. Kupetz
|
23,189
|
2,029
|
25,218
|
0.00
|
%
|
-
|
2,029
|
0.00
|
%
|
||||||||||||||||||||||
Frank
Frost Lane
|
62,612
|
5,479
|
68,091
|
0.01
|
%
|
-
|
5,479
|
0.01
|
%
|
||||||||||||||||||||||
JoAnn
Lanning
|
6,821
|
597
|
7,418
|
0.00
|
%
|
-
|
597
|
0.00
|
%
|
||||||||||||||||||||||
Paul
Latchford
|
-
|
17,936
|
17,936
|
0.00
|
%
|
-
|
17,936
|
0.00
|
%
|
||||||||||||||||||||||
Jerry
and Michelle Levine as TBE
|
139,138
|
12,175
|
151,313
|
0.03
|
%
|
-
|
12,175
|
0.02
|
%
|
||||||||||||||||||||||
Grover
A. Lewis
|
13,914
|
1,217
|
15,131
|
0.00
|
%
|
-
|
1,217
|
0.00
|
%
|
||||||||||||||||||||||
Brian
Leyda
|
12,857
|
1,125
|
13,982
|
0.00
|
%
|
-
|
1,125
|
0.00
|
%
|
||||||||||||||||||||||
Ezra
P. Mager
|
2,353,253
|
205,910
|
2,559,163
|
0.43
|
%
|
-
|
205,910
|
0.40
|
%
|
||||||||||||||||||||||
Thomas
Mazerski
|
1,882,615
|
164,729
|
2,047,344
|
0.35
|
%
|
-
|
164,729
|
(18
|
)
|
0.32
|
%
|
||||||||||||||||||||
Robert
William McCausland
|
463,794
|
40,582
|
504,376
|
0.09
|
%
|
-
|
40,582
|
0.08
|
%
|
||||||||||||||||||||||
Hugh
McConnell
|
88,907
|
7,779
|
96,686
|
0.02
|
%
|
-
|
7,779
|
0.02
|
%
|
||||||||||||||||||||||
Paul
B. McHugh
|
35,479
|
3,104
|
38,583
|
0.01
|
%
|
-
|
3,104
|
0.01
|
%
|
||||||||||||||||||||||
Randy
Moore
|
122,203
|
8,505
|
130,708
|
0.02
|
%
|
-
|
8,505
|
0.02
|
%
|
||||||||||||||||||||||
Mark
Norris
|
-
|
12,175
|
12,175
|
0.00
|
%
|
-
|
12,175
|
(34
|
)
|
0.00
|
%
|
||||||||||||||||||||
Richard
O’Connell
|
1,168,055
|
102,205
|
1,270,260
|
0.22
|
%
|
-
|
102,205
|
0.20
|
%
|
||||||||||||||||||||||
Jennifer
Orem
|
857
|
75
|
932
|
0.00
|
%
|
-
|
75
|
0.00
|
%
|
||||||||||||||||||||||
John
C. Payne
|
858,017
|
75,076
|
933,093
|
0.16
|
%
|
-
|
75,076
|
0.15
|
%
|
||||||||||||||||||||||
Jamie
Pollock
|
3,185
|
279
|
3,464
|
0.00
|
%
|
-
|
279
|
0.00
|
%
|
||||||||||||||||||||||
Richard
Ramlall
|
-
|
26,114
|
26,114
|
0.00
|
%
|
-
|
26,114
|
0.00
|
%
|
||||||||||||||||||||||
Cynthia
A. Ryan
|
-
|
15,218
|
15,218
|
0.00
|
%
|
-
|
15,218
|
0.00
|
%
|
||||||||||||||||||||||
Frederick
Sass
|
23,189
|
2,029
|
25,218
|
0.00
|
%
|
-
|
2,029
|
0.00
|
%
|
||||||||||||||||||||||
Joseph
P. Schmelzeis
|
28,987
|
2,536
|
31,523
|
0.01
|
%
|
-
|
2,536
|
0.00
|
%
|
||||||||||||||||||||||
Fredrik
C. Schreuder
|
231,895
|
20,291
|
252,186
|
0.04
|
%
|
-
|
20,291
|
0.04
|
%
|
||||||||||||||||||||||
Stephen
Schwartz
|
57,975
|
5,073
|
63,048
|
0.01
|
%
|
-
|
5,073
|
0.01
|
%
|
||||||||||||||||||||||
Shah,
Vipul
|
57,973
|
5,073
|
63,046
|
0.01
|
%
|
-
|
5,073
|
0.01
|
%
|
||||||||||||||||||||||
Spencer
Segura
|
417,413
|
36,524
|
453,937
|
0.08
|
%
|
-
|
36,524
|
0.07
|
%
|
||||||||||||||||||||||
Spencer
Trask Illumination Fund
|
584,379
|
51,133
|
635,512
|
0.11
|
%
|
-
|
51,133
|
(36
|
)
|
0.10
|
%
|
||||||||||||||||||||
Spencer
Trask Media & Communication Group, LLC
|
6,956,890
|
608,728
|
7,565,618
|
1.28
|
%
|
-
|
608,728
|
(36
|
)
|
1.18
|
%
|
||||||||||||||||||||
Melissa
Stoneberg
|
3,402
|
298
|
3,700
|
0.00
|
%
|
-
|
298
|
0.00
|
%
|
||||||||||||||||||||||
Stacey
Swoboda
|
3,428
|
300
|
3,728
|
0.00
|
%
|
-
|
300
|
0.00
|
%
|
||||||||||||||||||||||
Paul
Taylor
|
125,948
|
10,145
|
136,093
|
0.02
|
%
|
-
|
10,145
|
0.02
|
%
|
||||||||||||||||||||||
Luca
Toscani
|
-
|
2,914
|
2,914
|
0.00
|
%
|
-
|
2,914
|
0.00
|
%
|
||||||||||||||||||||||
Michele
Toscani
|
11,827
|
1,035
|
12,862
|
0.00
|
%
|
-
|
1,035
|
0.00
|
%
|
||||||||||||||||||||||
Greg
Van Allen
|
35,357
|
1,125
|
36,482
|
0.01
|
%
|
-
|
1,125
|
0.01
|
%
|
||||||||||||||||||||||
John
Vandewalle
|
27,828
|
2,435
|
30,263
|
0.01
|
%
|
-
|
2,435
|
0.00
|
%
|
||||||||||||||||||||||
Viventures
2 Entrepeneurs Fund LP
|
40,002
|
3,500
|
43,502
|
0.01
|
%
|
-
|
3,500
|
(37
|
)
|
0.01
|
%
|
||||||||||||||||||||
Viventures
2 FCPR
|
14,054,707
|
1,229,782
|
15,284,489
|
2.59
|
%
|
-
|
1,229,782
|
(37
|
)
|
2.38
|
%
|
||||||||||||||||||||
Nancy
Walcutt
|
3,622
|
317
|
3,939
|
0.00
|
%
|
-
|
317
|
0.00
|
%
|
||||||||||||||||||||||
Subtotal
|
32,722,336
|
3,223,625
|
35,945,961
|
6.07
|
%
|
-
|
3,223,625
|
(19
|
)
|
5.53
|
%
|
||||||||||||||||||||
Martin
Levetin
|
-
|
400,000
|
400,000
|
0.07
|
%
|
200,000
|
(3
|
)
|
600,000
|
(20
|
)
|
0.00
|
%
|
||||||||||||||||||
Geoffrey
B. Amend
|
-
|
3,064,311
|
3,064,311
|
0.52
|
%
|
935,689
|
4,000,000
|
(21
|
)
|
0.00
|
%
|
||||||||||||||||||||
Doug
Bethell
|
-
|
208,333
|
208,333
|
0.04
|
%
|
791,667
|
1,000,000
|
(40
|
)
|
0.00
|
%
|
||||||||||||||||||||
Lisa
Bickford
|
-
|
72,917
|
72,917
|
0.01
|
%
|
277,083
|
350,000
|
(41
|
)
|
0.00
|
%
|
||||||||||||||||||||
Larry
Bouts
|
-
|
862,500
|
862,500
|
0.15
|
%
|
187,500
|
1,050,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Dr.
Bruce Bowman
|
10,000
|
312,500
|
322,500
|
0.05
|
%
|
187,500
|
500,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Hank
Deily
|
-
|
354,167
|
354,167
|
0.06
|
%
|
895,833
|
1,250,000
|
(23
|
)
|
0.00
|
%
|
||||||||||||||||||||
John
Dumbleton
|
831,615
|
-
|
831,615
|
0.14
|
%
|
-
|
831,615
|
(24
|
)
|
0.00
|
%
|
||||||||||||||||||||
Kurt
Gordon
|
6,071,524
|
1,375,000
|
7,446,524
|
1.26
|
%
|
125,000
|
1,500,000
|
(25
|
)
|
1.03
|
%
|
||||||||||||||||||||
Don
Gunther
|
39,500
|
862,500
|
902,000
|
0.15
|
%
|
187,500
|
1,050,000
|
(22
|
)
|
0.01
|
%
|
||||||||||||||||||||
Hawk
Associates, Inc.
|
-
|
200,000
|
200,000
|
0.03
|
%
|
-
|
200,000
|
(26
|
)
|
0.00
|
%
|
||||||||||||||||||||
John
von Harz
|
-
|
933,333
|
933,333
|
0.16
|
%
|
266,667
|
1,200,000
|
(27
|
)
|
0.00
|
%
|
||||||||||||||||||||
Kevin
Kuykendall
|
38,950
|
3,500,000
|
3,538,950
|
0.60
|
%
|
-
|
3,500,000
|
(28
|
)
|
0.01
|
%
|
||||||||||||||||||||
Michael
Kleeman
|
-
|
250,000
|
250,000
|
0.04
|
%
|
-
|
250,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Paul
Latchford
|
-
|
62,500
|
62,500
|
0.01
|
%
|
187,500
|
250,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Chris
MacFarland
|
-
|
1,209,091
|
1,209,091
|
0.20
|
%
|
90,909
|
1,300,000
|
(29
|
)
|
0.00
|
%
|
||||||||||||||||||||
James
Magruder
|
-
|
2,208,333
|
2,208,333
|
0.37
|
%
|
791,667
|
3,000,000
|
(42
|
)
|
0.00
|
%
|
||||||||||||||||||||
Tammy
Martin
|
-
|
1,604,167
|
1,604,167
|
0.27
|
%
|
395,833
|
2,000,000
|
(30
|
)
|
0.00
|
%
|
||||||||||||||||||||
Tom
Mazerski
|
-
|
1,812,839
|
1,812,839
|
0.31
|
%
|
187,161
|
2,000,000
|
(35
|
)
|
0.00
|
%
|
||||||||||||||||||||
Michael
O’Neil
|
111,500
|
1,209,091
|
1,320,591
|
0.22
|
%
|
90,909
|
1,300,000
|
(38
|
)
|
0.02
|
%
|
||||||||||||||||||||
Ocean
Avenue Advisors
|
-
|
2,000,000
|
2,000,000
|
0.34
|
%
|
-
|
2,000,000
|
(31
|
)
|
0.00
|
%
|
||||||||||||||||||||
Philip
Otto
|
-
|
312,500
|
312,500
|
0.05
|
%
|
187,500
|
500,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Ryan
Beck & Co.
|
500,000
|
-
|
500,000
|
0.08
|
%
|
-
|
500,000
|
(44
|
)
|
0.00
|
%
|
||||||||||||||||||||
Bruce
Sanguinetti
|
-
|
4,000,000
|
4,000,000
|
0.67
|
%
|
-
|
4,000,000
|
(32
|
)
|
0.00
|
%
|
||||||||||||||||||||
Paul
Silverman
|
-
|
1,062,500
|
1,062,500
|
0.18
|
%
|
187,500
|
1,250,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Don
Sledge
|
-
|
909,091
|
909,091
|
0.15
|
%
|
90,909
|
1,000,000
|
(39
|
)
|
0.00
|
%
|
||||||||||||||||||||
Jerry
Sullivan
|
-
|
3,190,789
|
3,190,789
|
0.54
|
%
|
6,809,211
|
10,000,000
|
(43
|
)
|
0.00
|
%
|
||||||||||||||||||||
Fred
Tarter
|
-
|
1,000,000
|
1,000,000
|
0.17
|
%
|
-
|
1,000,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Byron
Wagner
|
-
|
18,493
|
18,493
|
0.00
|
%
|
231,507
|
250,000
|
(22
|
)
|
0.00
|
%
|
||||||||||||||||||||
Jay
O. Wright
|
302,000
|
17,606,742
|
17,908,742
|
2.95
|
%
|
2,575,758
|
5,000,000
|
(33
|
)
|
2.54
|
%
|
||||||||||||||||||||
Subtotal
|
7,905,089
|
50,201,697
|
58,106,786
|
9.09
|
%
|
15,680,803
|
(3
|
)
|
52,031,615
|
3.32
|
%
|
||||||||||||||||||||
Kevin
Kimberlin Partners, LP
|
17,272
|
-
|
17,272
|
0.00
|
%
|
-
|
17,272
|
0.00
|
%
|
||||||||||||||||||||||
Spencer
Trask Media & Comm Group, LLC
|
6,150,700
|
-
|
6,150,700
|
1.04
|
%
|
-
|
6,150,700
|
0.00
|
%
|
||||||||||||||||||||||
Spencer
Trask Illumination Fund, LLC
|
244,705
|
-
|
244,705
|
0.04
|
%
|
-
|
244,705
|
0.00
|
%
|
||||||||||||||||||||||
Southern
Farm Bureau Life Insurance Co.
|
34,806,125
|
-
|
34,806,125
|
5.91
|
%
|
-
|
34,806,125
|
0.00
|
%
|
||||||||||||||||||||||
McCarty
Wireless, LLC
|
9,216,626
|
-
|
9,216,626
|
1.57
|
%
|
-
|
9,216,626
|
0.00
|
%
|
||||||||||||||||||||||
Tony
Tam
|
11,081
|
-
|
11,081
|
0.00
|
%
|
-
|
11,081
|
0.00
|
%
|
||||||||||||||||||||||
Pacific
Infinity Company, Inc.
|
496,169
|
-
|
496,169
|
0.08
|
%
|
-
|
496,169
|
0.00
|
%
|
||||||||||||||||||||||
Terry
Kwong
|
2,999,093
|
-
|
2,999,093
|
0.51
|
%
|
-
|
2,999,093
|
0.00
|
%
|
||||||||||||||||||||||
Wilson
Wong
|
578,471
|
-
|
578,471
|
0.10
|
%
|
-
|
578,471
|
0.00
|
%
|
||||||||||||||||||||||
Chida
Tse
|
227,368
|
-
|
227,368
|
0.04
|
%
|
-
|
227,368
|
0.00
|
%
|
||||||||||||||||||||||
Ray
Tong
|
129,366
|
-
|
129,366
|
0.02
|
%
|
-
|
129,366
|
0.00
|
%
|
||||||||||||||||||||||
Philip
Matos
|
784,107
|
-
|
784,107
|
0.13
|
%
|
-
|
784,107
|
0.00
|
%
|
||||||||||||||||||||||
Jack
Wong
|
4,508,852
|
-
|
4,508,852
|
0.77
|
%
|
-
|
4,508,852
|
0.00
|
%
|
||||||||||||||||||||||
Robert
Kane
|
97,644
|
-
|
97,644
|
0.02
|
%
|
-
|
97,644
|
0.00
|
%
|
||||||||||||||||||||||
Julie
Baigent SEP IRA
|
28,991
|
-
|
28,991
|
0.00
|
%
|
-
|
28,991
|
0.00
|
%
|
||||||||||||||||||||||
Jenifer
and John E. Smyth
|
5,754
|
-
|
5,754
|
0.00
|
%
|
-
|
5,754
|
0.00
|
%
|
||||||||||||||||||||||
Elizabeth
H. Kinney
|
5,754
|
-
|
5,754
|
0.00
|
%
|
-
|
5,754
|
0.00
|
%
|
||||||||||||||||||||||
Lane
Cockrell
|
3,019
|
-
|
3,019
|
0.00
|
%
|
-
|
3,019
|
0.00
|
%
|
||||||||||||||||||||||
Christopher
P. Truhan
|
2,877
|
-
|
2,877
|
0.00
|
%
|
-
|
2,877
|
0.00
|
%
|
||||||||||||||||||||||
Andria
Langenberg
|
2,820
|
-
|
2,820
|
0.00
|
%
|
-
|
2,820
|
0.00
|
%
|
||||||||||||||||||||||
Jerry
M. Sullivan, Jr.
|
10,001,856
|
-
|
10,001,856
|
1.70
|
%
|
-
|
10,001,856
|
(43
|
)
|
0.00
|
%
|
||||||||||||||||||||
John
Greathouse
|
240,079
|
-
|
240,079
|
0.04
|
%
|
-
|
240,079
|
0.00
|
%
|
||||||||||||||||||||||
Jonathan
B. Steadman
|
5,434,899
|
-
|
5,434,899
|
0.92
|
%
|
-
|
5,434,899
|
(46
|
)
|
0.00
|
%
|
||||||||||||||||||||
Randy
James Eure
|
3,564,597
|
-
|
3,564,597
|
0.61
|
%
|
-
|
3,564,597
|
0.00
|
%
|
||||||||||||||||||||||
John
Yerger
|
1,502,309
|
-
|
1,502,309
|
0.26
|
%
|
-
|
1,502,309
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Ken
Harris
|
83,422
|
-
|
83,422
|
0.01
|
%
|
-
|
83,422
|
0.00
|
%
|
||||||||||||||||||||||
David
McIntosh
|
614,909
|
-
|
614,909
|
0.10
|
%
|
-
|
614,909
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Gregory
Wolff
|
538,409
|
-
|
538,409
|
0.09
|
%
|
-
|
538,409
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Jerry
O'Rear
|
339,067
|
-
|
339,067
|
0.06
|
%
|
-
|
339,067
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Sandra
Miller
|
593,690
|
-
|
593,690
|
0.10
|
%
|
-
|
593,690
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Scott
Tenney
|
3,733
|
-
|
3,733
|
0.00
|
%
|
-
|
3,733
|
0.00
|
%
|
||||||||||||||||||||||
Jim
Cade
|
736
|
-
|
736
|
0.00
|
%
|
-
|
736
|
0.00
|
%
|
||||||||||||||||||||||
Scott
Goodno
|
1,470
|
-
|
1,470
|
0.00
|
%
|
-
|
1,470
|
0.00
|
%
|
||||||||||||||||||||||
Dan
Berry
|
589
|
-
|
589
|
0.00
|
%
|
-
|
589
|
0.00
|
%
|
||||||||||||||||||||||
Jennifer
Relfe
|
8,821
|
-
|
8,821
|
0.00
|
%
|
-
|
8,821
|
0.00
|
%
|
||||||||||||||||||||||
Lisa
Vicory
|
2,353
|
-
|
2,353
|
0.00
|
%
|
-
|
2,353
|
0.00
|
%
|
||||||||||||||||||||||
Ricky
G. Luke
|
3,059,836
|
-
|
3,059,836
|
0.52
|
%
|
-
|
3,059,836
|
(47
|
)
|
0.00
|
%
|
||||||||||||||||||||
Alan
Crancer
|
1,422,748
|
-
|
1,422,748
|
0.24
|
%
|
-
|
1,422,748
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Troy
Browning
|
603,226
|
-
|
603,226
|
0.10
|
%
|
-
|
603,226
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Paul
Latchford
|
280,009
|
-
|
280,009
|
0.05
|
%
|
-
|
280,009
|
0.00
|
%
|
||||||||||||||||||||||
Johnny
McCarty
|
280,009
|
-
|
280,009
|
0.05
|
%
|
-
|
280,009
|
0.00
|
%
|
||||||||||||||||||||||
Bobby
Lloyd
|
542,026
|
-
|
542,026
|
0.09
|
%
|
-
|
542,026
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Ashley
Barlow
|
75,937
|
-
|
75,937
|
0.01
|
%
|
-
|
75,937
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Penny
Melvin
|
258,976
|
-
|
258,976
|
0.04
|
%
|
-
|
258,976
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Rebekah
Schomisch
|
229,500
|
-
|
229,500
|
0.04
|
%
|
-
|
229,500
|
(48
|
)
|
0.00
|
%
|
||||||||||||||||||||
Subtotal
|
90,000,000
|
-
|
90,000,000
|
15.28
|
%
|
-
|
90,000,000
|
(45
|
)
|
0.00
|
%
|
||||||||||||||||||||
Grand
Totals
|
148,385,295
|
88,575,322
|
236,960,617
|
34.98
|
%
|
62,820,438
|
238,852,745
|
8.23
|
%
|
(1) |
The
percentage of outstanding shares is based on 588,888,574 shares
of common
stock outstanding on June 30, 2006, together with shares deemed
beneficially owned by each such stockholder. Beneficial ownership
is
determined in accordance with the rules of the Securities and Exchange
Commission and generally includes voting or investment power with
respect
to securities. Shares of common stock that may be obtained within
60 days
of June 30, 2006 are deemed to be beneficially owned by the person
holding
such securities that are convertible or exchangeable into shares
of common
stock for the purpose of computing the percentage of ownership
of such
person, but are not treated as outstanding for the purpose of computing
the percentage ownership of any other
person.
|
(2) |
The
Bethell Family Trust received a total of 10,000,000 shares of our
common
stock, 6,000,000 shares on July 13, 2005 and 4,000,000 shares on
August
24, 2005, in connection with our acquisition of American Fiber
Network,
Inc. Doug Bethell, the former CEO of AFN is currently an Executive
Vice
President of the Compnay subsequent to our acquisition. Mr. Bethell
maintains investment and voting control of the Bethell Family
Trust.
|
(3) |
Represents
shares of our common stock that will become exercisable pursuant
to the
terms of outstanding stock warrant and stock option agreements
beyond 60
days from June 30, 2006. Consequently, these shares are not considered
beneficially owned by the holder of the stock warrant or option
on June
30, 2006.
|
(4) |
These
former owners of The River Internet Access Co., acquired by us
in
September 2004, hold 1,307,870 shares of our common stock that
were issued
on October 6, 2005 upon the conversion of debentures received by
them in
connection with the acquisition. The debentures had a maturity
date of
September 16, 2006, bore interest at the annual rate of 3.00%,
and were
convertible into shares of our common stock at any time during
their terms
at $0.20 per share. The debenture principal amounts were subject
to
downward adjustments pending the results of an acquisition audit
or the
occurrence of any damages as defined in the merger agreement.
|
(5) |
Cornell
Capital holds a secured debenture in the amount of $15,149,650
that is
convertible into 55,089,635 shares of our common stock at a per
share
price of $0.275 and a warrant to purchase 10,000,000 shares of
our common
stock at a per share price of $0.275, both dated June 30, 2006.
This
warrant expires one year after the shares of our common stock subject
to
the warrant are registered for resale by the SEC. Cornell Capital
also
holds a 5-year warrant to purchase 6,000,000 shares of our common
stock at
a per share price of $0.50 dated May 13, 2005. Mr. Mark Angelo
maintains
investment and voting control of the shares. For presentation purposes
above, the shares of our common stock issuable upon the conversion
of the
debenture that would result in ownership greater than 4.99% are
not
considered beneficially owned by Cornell Capital at June 30, 2006.
Pursuant to the terms of the debenture, conversion of the debenture
for a
number of shares in excess of that number of shares which, upon
giving
effect to such conversion, would cause the aggregate number of
shares
beneficially owned by Cornell Capital to exceed 4.99% of our outstanding
shares following such conversion requires at least 65 days prior
notice.
No such notice has been received by us. Upon the receipt of such
notice,
conversion could occur pursuant to the terms of the debenture with
Cornell
Capital becoming the beneficial owner of the shares. See Note 7
to the
Condensed Consolidated Financial Statements as of June 30, 2006
for
additional information about the convertible debenture and the
stock
warrants.
|
(6) |
Represents
warrants to purchase shares of our common stock that were issued
on
November 15, 2004 to Airlie Master Opportunity Fund, Ltd., the
source of
the Davel bridge financing, and the brokers involved with the arrangement
of this loan. Dort and Seth Cameron maintain investment and voting
control
of the Airlie Fund. These warrants are exercisable at a per share
price of
$0.20, and they expire on November 14, 2011.
|
(7) |
Steven
Feinberg maintains investment and voting control of Ableco Finance,
LLC.
|
(8) |
Lynn
Tilton maintains investment and voting control of ARK-CLO 2000-1,
Limited.
|
(9) |
Matthew
Kimble maintains investment and voting control of Avenue Special
Situations Fund, II, LP.
|
(10) |
Everett
Schenk maintains investment and voting control of BNP
Paribus.
|
(11) |
Steven
Feinberg maintains investment and voting control of Cerberus Partners,
L.P.
|
(12) |
Dennis
Archer maintains investment and voting control of Foothill Partners
III.
|
(13) |
Sheila
Finnerty maintains investment and voting control of Morgan Stanley
Prime
Income Trust.
|
(14) |
Frank
Devine maintains investment and voting control of PNC Bank
N.A.
|
(15) |
James
P. Cecil maintains investment and voting control of U.S. Bank,
N.A.
|
(16) |
Scott
Diehl maintains investment and voting control of Wells Fargo Foothill,
Inc.
|
(17) |
Represents
warrants to purchase shares of our common stock that were issued
on
November 15, 2004 to certain lenders in connection with our acquisition
of
100% of the senior secured debt of Davel and an assignment by those
lenders of their shares of Davel's common stock representing approximately
95% of Davel's issued and outstanding common stock. These warrants
are
exercisable at a per share price of $0.30 and expire on November
14, 2009.
|
(18) |
Represents
warrants to purchase shares of our common stock, 117,663 shares
at $0.30
per share and 47,065 shares at $0.35 per share, that expire on
October 15,
2009. Mr.
Mazerski, a founder and the President and CEO of CloseCall prior
to our
acquisition, currently serves as Chief Executive Officer of Close
Call.
|
(19) |
Represents
warrants to purchase shares of our common stock that were issued
on
October 15, 2004 to the former owners of CloseCall America in connection
with its acquisition by us and that expire on October 15, 2009.
Warrants
to purchase approximately 2,302,590 shares are exercisable at $0.30
per
share, and warrants to purchase approximately 921,035 shares are
exercisable at $0.35 per share.
|
(20) |
Martin
Levetin, a former owner of Evergreen Open Broadband Corporation,
received
a warrant to purchase 600,000 shares of our common stock on April
21, 2005
in connection with our acquisition of Evergreen. Mr. Levetin's
warrant is
exercisable at a per share price of $0.16, and expires on April
21, 2010.
|
(21) |
Represents
warrants to purchase 2,000,000, 1,500,000 and 500,000 shares of
our common
stock that were awarded to Geoffrey Amend, who currently serves
as our
Senior Vice President, General Counsel and Secretary, on November
1, 2004,
April 20, 2005, and February 7, 2006, respectively. 50% of the
warrant for
2,000,000 shares vests ratably over 24 months from the award date,
and
1,000,0000 shares vested upon our achieving $5 million in EBITDA
over a
consecutive 12 month period. The warrant for 1,500,000 shares vests
over a
23-month period from the award date. The warrant for 500,000 shares
vests
over a 24-month period from April 1, 2006. These warrants are exercisable
at per share prices of $0.20, $0.155 and $0.233, respectively,
and expire
on November 1, 2014, April 20, 2015, and February 7, 2016, respectively.
|
(22) |
Represents
warrants to purchase common stock issued to each member of our
board of
advisors as follows - Messrs. Silverman and Tarter were each issued
a
10-year warrant to purchase 1,000,000 shares of our common stock
on
January 1, 2004 and July 20, 2004, respectively. These warrants
are
exercisable at $.02 and $0.20 per share, respectively and they
were fully
vested at March 31, 2006. Messrs. Bouts and Gunther were each issued
a
10-year warrant to purchase 800,000 shares of our common stock
on January
1, 2004 and June 28, 2004, respectively. These warrants are exercisable
at
$0.02 and $0.20 per share, respectively, and they were fully vested
at
March 31, 2006. Mr. Otto and Dr. Bowman were each issued a 10-year
warrant
to purchase 250,000 shares of our common stock, dated February
17, 2005,
that vests ratably over 12 months from the date of award. These
warrants
are exercisable at a per share price of $0.155 and $0.193, respectively.
Mr. Kleeman was issued a 10-year warrant to purchase 250,000 shares
of our
common stock on May 17, 2005 that vests ratably over 12 months
from the
date of award. This warrant is exercisable at a price of $0.33
per share.
Messrs. Bouts, Bowman, Gunther, Latchford, Otto, Silverman and
Dr. Bowman
were each awarded a 10-year warrant to purchase 250,000 shares
of our
common stock on March 31, 2006 that vests in quarterly installments
during
fiscal year 2007, and that is exercisable at a per share price
of $0.22.
On April 1, 2006, Mr. Wagner was awarded a 10-year warrant to purchase
250,000 shares of our common stock that vests in equal quarterly
installments during fiscal year 2007 and that is exercisable at
a per
share price of $0.20.
|
(23) |
Represents
10-year warrants to purchase 750,000 shares and 500,000 share of
our
common stock awarded on June 20, 2005 and February 7, 2006, respectively,
to Hank Deily, who currently serves as our Senior Vice President,
Chief
Accounting Officer. The warrant to purchase 750,000 shares vests
in three
equal installments on March 31, 2006, 2007 and 2008, and is exercisable
at
a per share price of $0.31. The warrant to purchase 500,000 shares
vests
over a 24-month period beginning April 1, 2006, and is exercisable
at a
per share price of $0.233.
|
(24) |
Mr.
Dumbleton was our Executive Vice President, Sales and Business
Development, until his employment with us ended on January 15,
2006.
|
(25) |
Represents
a warrant to purchase 1,500,000 shares of our common stock awarded
on
April 1, 2005 to Kurt Gordon, who served as our Chief Financial
Officer
until March 31, 2006. This
warrant vested over 12 months from the date of award, is exercisable
at a
per share price of $0.22 per share, and expires on April 1,
2015.
|
(26) |
Represents
a warrant to purchase 200,000 shares of our common stock issued
on
February 1, 2003 to Hawk Associates, Inc., a firm that currently
provides
investor and public relations services to us. This warrant was
fully
vested at December 31, 2005, is exercisable at a per share price
of $0.15,
and expires on February 1, 2010.
|
(27) |
Includes
a 10-year warrant to purchase 800,000 shares of our common stock
awarded
on January 1, 2004 to John von Harz, a former member of our board
of
advisors, who currently serves as a Vice President of our Kite
Networks
organization in the area of business development; this warrant
was fully
vested on December 31, 2005, and is exercisable at a per share
price of
$0.02. Also includes a 10-year option to purchase 400,000 shares
of our
common stock awarded on January 25, 2006 that is exercisable at
a per
share price of $0.26 and that vests in three equal installments
on March
31, 2006, 2007 and 2008.
|
(28) |
Represents
warrants to purchase 3,500,000 shares of our common stock awarded
on June
10, 2004 to Kevin Kuykendall who served as President of our voice
business
segment from
June 2004 through December 2004. These warrants were fully vested
on
December 31, 2005, are exercisable at a per share price of $0.20,
and
expire on June 10, 2014.
|
(29) |
Represents
a 10-year warrant to purchase 800,000 shares of our common stock
awarded
on March 1, 2004 to Chris MacFarland, a member of our Board of
Directors,
that is fully vested;
a 10-year warrant to purchase 250,000 shares of our common stock,
awarded
on June 16, 2005, that is fully vested; and a 10-year warrant to
purchase
250,000 shares of our common stock
that was awarded on February 7, 2006 and that vests ratably until
December
7, 2006. These warrants are exercisable at per share prices of
$0.10,
$0.15 and $0.233,
respectively.
|
(30) |
Represents
10-year warrants to purchase 1,500,000 shares and 500,000 of our
common
stock awarded on April 20, 2005 and February 7, 2006, respectively,
to
Tammy Martin, formerly the General Counsel of Davel, who currently
serves
as its Chief Executive Officer, and who also serves as our Senior
Vice
President, Chief Administrative Officer, and Treasurer. The warrant
to
purchase 1,500,000 shares is fully vested and the warrant to purchase
500,000 shares vests ratably over a 24-month period beginning April
1,
2006. The warrants are exercisable at a per share price of $0.155,
and
$0.233, respectively.
|
(31) |
Represents
shares issuable upon the exercise of a warrant to purchase our
common
stock that was granted in July 2004 in connection with the provision
of
investor relations
services. This warrant was fully vested at December 31, 2005, is
exercisable at a per share price of $0.18, and expires on July
1,
2014.
|
(32) |
Represents
10-year warrants to purchase 3,000,000 and 1,000,000 shares of
our common
stock awarded on January 1, 2005 and January 23, 2006, respectively
to
Bruce Sanguinetti, the former President and Chief Executive of
NeoReach
Wireless. The warrant to purchase 3,000,000 shares is fully vested,
and is
exercisable at a per share price of $0.16. The warrant to purchase
1,000,000 shares is fully vested and is exercisable at a per share
price
of $0.19.
|
(33) |
Represents
a warrant to purchase 5,000,000 shares of our common stock awarded
on
April 1, 2005 to Jay O. Wright who currently serves as our Chief
Executive
Officer; Mr.
Wright also serves as Chairman of our Board of Directors. This
warrant
vests ratably over 33 months from April 1, 2005, is exercisable
at a per
share price of $0.22, and expires
on April 1, 2015.
|
(34) |
Represents
warrants to purchase shares of our common stock, 8,696 shares at
$0.30 per
share and 3,478 shares at $0.35 per share, that expire on October
15,
2009. Mr. Norris currently serves as Chief Financial Officer of
our voice
business segment on a temporary basis. This warrant was fully vested
on
December 31, 2005.
|
(35) |
Represents
a warrant to purchase 1,500,000 shares of our common stock that
was
awarded to Mr. Mazerski on April 20, 2005. The warrant vests over
an
18-month period in equal monthly installments from April 20, 2005,
is
exercisable at a per share price of $0.155 and expires on April
20, 2015.
|
(36) |
William
Dioguardi, President of Spencer Trask Ventures, Inc. maintains
investment
and voting control of these shares.
|
(37) |
Gabriel
Montessus maintains investment and voting control of these
shares.
|
(38) |
Includes
a 10-year warrant to purchase 800,000 shares of our common stock
awarded
on January 1, 2004 to Michael O'Neil, a member of our Board of
Directors,
that was fully vested on December 31, 2005, a 10-year warrant to
purchase
250,000 shares of our common stock, awarded on June 16, 2005, that
is
fully vested, and a 10-year warrant to purchase 250,000 shares
of our
common stock that was awarded on February 7, 2006, and that vests
ratably
until December 7, 2006. These warrants are exercisable at per share
prices
of $0.02, $0.15, and $0.223, respectively.
|
(39) |
Includes
a 10-year warrant to purchase 500,000 shares of our common stock
awarded
on January 19, 2005 to Don Sledge, a member of our Board of Directors,
that is fully vested, a 10-year warrant to purchase 250,000 shares
of our
common stock, awarded on June 16, 2005, that is fully vested, and
a
10-year warrant to purchase 250,000 shares of our common stock
that was
awarded on February 7, 2006 and that vests ratably until December
7, 2006.
These warrants are exercisable at per share prices of $0.185, $0.15,
and
$0.233, respectively.
|
(40) |
Represents
a warrant to purchase 1,000,000 shares of our common stock that
was
awarded on February 7, 2006, that vests ratably over a 24-month
period
that commenced on April 1, 2006, and that is exercisable at a price
of
$0.233 per share.
|
(41) |
Represents
a warrant to purchase 350,000 shares of our common stock awarded
on
February 7, 2006 to Lisa Bickford, our Vice President, Network
Operations,
and former president of InReach Internet, LLC, that vests ratably
over a
24-month period commencing April 1, 2006, that expires on April
1, 2016,
and that is exercisable at a per share price of $0.233.
|
(42) |
Includes
a 10-year option to purchase 2,000,000 shares of our common stock
awarded
on September 15, 2005 to James Magruder, our Executive Vice President,
Integration, that is fully vested and exercisable at a per share
price of
$0.27 per share. Also includes a 10-year warrant to purchase 1,000,000
shares of our common stock that vests ratably over a 24-month period
commencing April 1, 2006, and that is exercisable at a per share
price of
$0.233.
|
(43) |
Includes
a 10-year warrant to purchase 10.000,000 shares of our common stock
awarded on December 30, 2005 to Jerry Sullivan, our President and
Chief
Operating Officer, at an exercise price of $0.174 per share. Vesting
related to 2,500,000 occurred on February 1, 2006; vesting related
to
3,750,000 shares will occur ratably over a 38-month period that
commenced
on February 1, 2006; and vesting related to 3,750,000 shares will
occur
pursuant to goals mutually established by our Compensation Committee
and
Mr. Sullivan.
|
(44) |
Ryan,
Beck & Co. received these shares in connection with their providing
investment banking services to us.
|
(45) |
Represents
shares received by the minority-interest owners of Kite Broadband
LLC and
the stockholders of Kite Networks, Inc. in connection with their
acquisition by
us on January 31, 2006.
|
(46) |
Mr.
Steadman was chief operating officer of our wireless networks business
segment from February 1, 2006 through July 31, 2006.
|
(47) |
Mr.
Luke is employed by Kite Broadband LLC as its general
counsel.
|
(48) |
These
individuals are employees of Kite Broadband
LLC.
|
-
|
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.
|
Retail
operations (includes CloseCall America, Inc. and the
call centers)
|
161
employees
|
|||
Wireless
networks (includes Kite Broadband, LLC and Kite
Networks, Inc.)
|
76
employees
|
|||
Business
operations (includes Davel Communications, Inc and American Fiber
Network, Inc.)
|
53
employees
|
|||
Finance,
accounting legal and administration
|
24
employees
|
Business
Segment
|
2006
|
2005
|
|||||
Voice
Services
|
$
|
16,084,041
|
$
|
18,462,451
|
|||
Internet
Services
|
4,220,433
|
4,037,400
|
|||||
Wireless
Networks
|
3,038,312
|
5,994
|
|||||
Corporate
|
-
|
-
|
|||||
Total
Revenues
|
$
|
23,342,786
|
$
|
22,505,845
|
Business
Segment
|
2006
|
2005
|
|||||
Voice
Services
|
68.9
|
%
|
82.0
|
%
|
|||
Internet
Services
|
18.1
|
18.0
|
|||||
Wireless
Networks
|
13.0
|
-
|
|||||
Corporate
|
-
|
-
|
|||||
Total
Revenues
|
100.0
|
%
|
100.0
|
%
|
Business
Segment
|
2006
|
2005
|
|||||
Voice
Services
|
$
|
72,356,453
|
$
|
32,009,084
|
|||
Internet
Services
|
16,940,513
|
13,884,060
|
|||||
Wireless
Networks
|
9,716,501
|
-
|
|||||
Corporate
|
-
|
615,000
|
|||||
Total
Revenues
|
$
|
99,013,467
|
$
|
46,508,144
|
Business
Segment
|
2006
|
2005
|
|||||
Voice
Services
|
73.1
|
%
|
68.8
|
%
|
|||
Internet
Services
|
17.1
|
29.9
|
|||||
Wireless
Networks
|
9.8
|
-
|
|||||
Corporate
|
-
|
1.3
|
|||||
Total
Revenues
|
100.0
|
%
|
100.0
|
%
|
Acquired
Company
|
2006
|
2005
|
Change
|
|||||||
Davel
|
$
|
8,197,498
|
$
|
11,138,907
|
$
|
(2,941,409
|
)
|
|||
CloseCall
(includes Affinity and US1)
|
5,910,321
|
7,287,082
|
(1,376,761
|
)
|
||||||
Kite
Broadband
|
2,982,998
|
-
|
2,982.998
|
|||||||
AFN
|
1,976,222
|
-
|
1,976,222
|
|||||||
InReach
|
1,239,595
|
-
|
1,239,595
|
|||||||
Total
Revenues
|
$
|
20,306,634
|
$
|
18,425,989
|
$
|
1,880,645
|
Consolidated
operating expenses, quarter ended June 30, 2005
|
$
|
9,310,000
|
||
Operating
expenses of acquired companies
|
2,590,000
|
|||
Operating
expenses of comparable businesses
|
(236,000
|
)
|
||
Stock
compensation charge (adoption of SFAS 123R)
|
485,000
|
|||
Restructure
charge
|
303,000
|
|||
Write-off
of investment banking fees
|
166,000
|
|||
ProGames
organizational costs
|
88,000
|
|||
Other,
net
|
130,000
|
|||
Consolidated
operating expenses, quarter ended June 30, 2006
|
$
|
12,836,000
|
Type
of Debt
|
2006
|
2005
|
|||||
Notes
payable to Cornell Capital
|
$
|
25,074
|
$
|
234,312
|
|||
SEDA
draw discounts
|
137,795
|
94,958
|
|||||
Convertible
debenture (including discount amortization amounts)
|
386,968
|
208,161
|
|||||
Airlie
bridge loan
|
-
|
381,225
|
|||||
Other,
net
|
(155,762
|
)
|
13,519
|
||||
Interest
Expense, net
|
$
|
394,075
|
$
|
932,175
|
|
2006
|
2005
|
|||||
Net
income/(loss)
|
$
|
(4,737,507
|
)
|
$
|
419,191
|
||
Add
non-EBITDA items included in net results:
|
|||||||
Depreciation
and amortization
|
1,330,911
|
822,377
|
|||||
Interest
expense, net
|
394,075
|
932,175
|
|||||
Goodwill
impairment, restructuring charges and write-offs
|
906,099
|
-
|
|||||
Stock
compensation expense
|
485,091
|
-
|
|||||
Loss
on debt extinguishment
|
409,601
|
-
|
|||||
Adjusted
EBITDA
|
$
|
(1,211,730
|
)
|
$
|
2,173,743
|
Acquired
Company
|
2006
|
2005
|
Increase
|
|||||||
Davel
|
$
|
40,305,697
|
$
|
17,461,532
|
$
|
22,844,165
|
||||
CloseCall
(includes Affinity and US1)
|
27,029,379
|
13,716,165
|
13,313,214
|
|||||||
Kite
|
9,669,091
|
-
|
9669,091
|
|||||||
AFN
|
6,229,981
|
-
|
6,229,981
|
|||||||
InReach
|
2,279,990
|
-
|
2,279,990
|
|||||||
Total
Revenues
|
$
|
85,514,138
|
$
|
31,177,697
|
$
|
54,336,441
|
Fiscal
Quarter
|
2006
|
2005
|
Decrease
|
|||||||
First
|
$
|
11,138,906
|
$
|
14,137,713
|
$
|
(2,998,807
|
)
|
|||
Second
|
11,059,855
|
14,586,122
|
(3,526,267
|
)
|
||||||
Third
|
10,084,268
|
15,283,842
|
(5,199,574
|
)
|
||||||
Fourth
|
8,022,668
|
11,083,788
|
(3,061,120
|
)
|
||||||
Total
Davel Revenues
|
$
|
40,305,697
|
$
|
55,091,465
|
$
|
(14,785,768
|
)
|
|
For
the Year Ended March 31,
|
|||
|
2006
|
|||
Net
Income
|
$
|
260,502
|
||
Add
non-EBITDA items included in net results:
|
||||
Depreciation
and amortization
|
2,830,662
|
|||
Interest
expense, net
|
-
|
|||
Goodwill
impairment and restructuring costs
|
-
|
|||
Adjusted
EBITDA
|
$
|
3,091,164
|
Type
of Debt
|
2006
|
2005
|
|||||
Notes
payable to Cornell Capital
|
$
|
707,397
|
$
|
310,060
|
|||
SEDA
draw discounts
|
410,016
|
375,150
|
|||||
Convertible
debenture (including discount amortization of $348,443)
|
1,393,738
|
—
|
|||||
Airlie
bridge loan
|
381,225
|
1,144,186
|
|||||
Other,
net
|
(53,982
|
)
|
9,167
|
||||
Interest
Expense, net
|
$
|
2,838,394
|
$
|
1,838,563
|
|
2006
|
2005
|
|||||
Net
loss
|
$
|
(10,176,407
|
)
|
$
|
(5,359,722
|
)
|
|
Add
non-EBITDA items included in net results:
|
|||||||
Depreciation
and amortization
|
4,310,742
|
2,067,213
|
|||||
Interest
expense, net
|
2,838,394
|
1,838,563
|
|||||
Goodwill
impairment, litigation settlement and restructuring
charges
|
6,349,247
|
—
|
|||||
Adjusted
EBITDA
|
$
|
3,321,976
|
$
|
(1,453,946
|
)
|
Name
|
|
Age
|
|
Position
|
|
Jay
O. Wright
|
|
36
|
|
Chief
Executive Officer and Chairman of the Board
|
|
Jerry
M. Sullivan, Jr.
|
|
47
|
|
President,
Chief Operating Officer, and Director
|
|
Geoffrey
B. Amend
|
|
37
|
|
Senior
Vice President, General Counsel and Secretary
|
|
Jack
W. Beech
|
|
35
|
|
Director
|
|
Tom
Mazerski
|
|
53
|
|
Chief
Executive Officer, CloseCall America, Inc.
|
|
Tammy
L. Martin
|
|
41
|
|
Senior
Vice President, Chief Administration Officer and Treasurer
|
|
James
L. Magruder, Jr.
|
|
60
|
|
Executive
Vice President
|
|
Douglas
C. Bethell
|
|
56
|
|
President,
American Fiber Network, Inc.
|
|
Richard
H. Deily
|
|
52
|
|
Senior
Vice President, Chief Accounting Officer
|
|
Christopher
W. MacFarland
|
|
33
|
|
Director
|
|
Michael
G. O’Neil
|
|
63
|
|
Director
|
|
Donald
H. Sledge
|
|
66
|
|
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
|
|
Annual
Compensation
|
Long-Term
Compensatio(3)
|
||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary(1)
|
Bonus(2
|
Other
Annual
Compensation
|
Securities
Underlying
Options
|
All
Other
Compensation
|
|||||||||||||
Jay
O. Wright
|
2006
|
$
|
217,500
|
$
|
123,750
|
$
|
—
|
5,000,000
|
$
|
—
|
|||||||||
Chief
Executive Officer
|
2005
|
179,000
|
966,062
|
—
|
15,182,500
|
—
|
|||||||||||||
2004
|
45,500
|
17,990
|
—
|
—
|
—
|
||||||||||||||
Jerry
M. Sullivan, Jr.
|
2006
|
$
|
155,769
|
$
|
—
|
$
|
—
|
10,000,000
|
$
|
—
|
|||||||||
President
and
|
2005
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Chief
Operating Officer
|
2004
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Kurt
Gordon
|
2006
|
$
|
210,000
|
$
|
69,000
|
$
|
—
|
1,500,000
|
$
|
—
|
|||||||||
Chief
Financial Officer
|
2005
|
174,000
|
946,212
|
—
|
—
|
—
|
|||||||||||||
2004
|
13,000
|
10,000
|
—
|
6,500,000
|
—
|
||||||||||||||
Geoffrey
B. Amend
|
2006
|
$
|
176,250
|
$
|
34,379
|
$
|
—
|
2,000,000
|
$
|
—
|
|||||||||
Senior
Vice President,
General
Counsel and
|
2005
|
56,250
|
—
|
—
|
2,000,000
|
—
|
|||||||||||||
Secretary
|
2004
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Tom
Mazerski (4)
|
2006
|
$
|
180,000
|
$
|
49,544
|
$
|
—
|
1,500,000
|
$
|
—
|
|||||||||
Chief
Executive Officer,
|
2005
|
83,077
|
76,100
|
—
|
500,000
|
—
|
|||||||||||||
CloseCall
America, Inc.
|
2004
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
Tammy
L. Martin
|
2006
|
$
|
193,460
|
$
|
15,000
|
$
|
—
|
2,000,000
|
$
|
—
|
|||||||||
Chief
Administrative
|
2005
|
68,069
|
—
|
—
|
—
|
—
|
|||||||||||||
Officer
|
2004
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||
(1)
|
Mr.
Wright and Mr. Gordon joined
our Company during the fiscal year ended March 31, 2004. Mr. Amend,
Mr.
Mazerski and Ms. Martin
|
(2)
|
Bonus
amounts represent amounts earned during the fiscal year indicated.
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.
Such bonus amounts were paid during the subsequent fiscal
year.
|
(3)
|
There
were no restricted stock awards made by the Company to any named
executive
officers during the years presented above, nor were there any payouts
pursuant to long-term incentive
plans.
|
(4)
|
Pursuant
to the terms of his employment agreement, Mr. Mazerski is due a bonus
equal to 2.5% of the adjusted EBIDTA of the telco operations of the
Company. Mr. Mazerski disputes the Company’s calculation of his bonus.
|
Name
|
Number
of Securities Underlying Awards(1)
|
Percent
of Total Grants Awarded to Employees in 2006
|
Exercise
Price
per
Share
|
Expiration
Date
|
|||||||||
Jay
O. Wright
|
5,000,000
|
12.56
|
%
|
$
|
0.220
|
4/1/2015
|
|||||||
|
|||||||||||||
Jerry
M. Sullivan, Jr.
|
10,000,000
|
25.12
|
%
|
$
|
0.174
|
2/1/2016
|
|||||||
|
|||||||||||||
Kurt
Gordon
|
1,500,000
|
3.77
|
%
|
$
|
0.220
|
4/1/2015
|
|||||||
|
|||||||||||||
Geoffrey
B. Amend
|
1,500,000
|
3.77
|
%
|
$
|
0.155
|
4/20/2015
|
|||||||
|
500,000
|
1.26
|
%
|
$
|
0.233
|
4/1/2016
|
|||||||
|
|||||||||||||
Tammy
L. Martin
|
1,500,000
|
3.77
|
%
|
$
|
0.155
|
4/20/2015
|
|||||||
|
500,000
|
1.26
|
%
|
$
|
0.233
|
4/1/2016
|
|||||||
|
|||||||||||||
Tom
Mazerski
|
1,500,000
|
3.77
|
%
|
$
|
0.155
|
4/20/2015
|
|
Number
of Shares Acquired
|
Value
|
Number
of Securities Underlying Unexercised Options at
March
31, 2006
|
Value
of Unexercised
In-the-Money
Options at
March
31, 2006 (2)
|
|||||||||||||||
Name
|
Upon
Exercise
|
Realized
(1)
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||||||||||||
Jay
O. Wright
|
-
|
$
|
-
|
16,549,166
|
3,633,334
|
$
|
3,036,030
|
$
|
61,200
|
||||||||||
|
|||||||||||||||||||
Jerry
M. Sullivan, Jr.
|
-
|
-
|
2,697,368
|
7,302,632
|
129,474
|
350,526
|
|||||||||||||
|
|||||||||||||||||||
Kurt
Gordon
|
-
|
-
|
7,875,000
|
125,000
|
1,326,000
|
-
|
|||||||||||||
|
|||||||||||||||||||
Geoffrey
B. Amend
|
-
|
-
|
2,425,724
|
1,574,276
|
85,649
|
58,851
|
|||||||||||||
|
|||||||||||||||||||
Tammy
L. Martin
|
-
|
-
|
1,500,000
|
500,000
|
100,500
|
-
|
|||||||||||||
|
|||||||||||||||||||
Tom
Mazerski
|
-
|
-
|
1,258,478
|
906,250
|
61,417
|
39,083
|
Number
of Securities to Be
Issued
upon the Exercise
of
Outstanding Options,
Warrants
and Rights
|
Weighted-Average
Exercise
Price
of Outstanding
Options,
Warrants and Rights
|
Number
of Securities Remaining Available for
Future
Issuance under Equity
Compensation Plans (1)
|
||||||||
|
(a)
|
(b)
|
(c)
|
|||||||
Equity
Compensation Plans Approved by the Stockholders (2)
|
11,076,000
|
$
|
0.226
|
18,924,000
|
||||||
Equity
Compensation Plans Not Approved by the Stockholders (3)
|
74,832,500
|
$
|
0.122
|
-
|
||||||
Totals
|
85,908,500
|
$
|
0.135
|
18,924,000
|
Name
and Address
|
Title
of Class
|
Shares
Beneficially
Owned
(1)
|
Percent
of
Class (1)
|
|||||||
Southern
Farm Bureau Life Insurance Co. (2)
|
Common
|
34,806,125
|
5.91
|
%
|
||||||
Cornell
Capital Partners, LP (3)
|
Common
|
30,600,000
|
4.99
|
%
|
||||||
Jay
O. Wright (4)
|
Common
|
17,908,742
|
2.95
|
%
|
||||||
Jerry
M. Sullivan, Jr. (5)
|
Common
|
13,192,645
|
2.23
|
%
|
||||||
Tom
Mazerski (6)
|
Common
|
3,860,959
|
*
|
|||||||
Geoffrey
B. Amend (7)
|
Common
|
3,064,311
|
*
|
|||||||
Tammy
L. Martin (7)
|
Common
|
1,604,167
|
*
|
|||||||
Michael
G. O’Neil (8)
|
Common
|
1,320,591
|
*
|
|||||||
Christopher
W. MacFarland (7)
|
Common
|
1,209,091
|
*
|
|||||||
Donald
H. Sledge (7)
|
Common
|
909,091
|
*
|
|||||||
Officers
and Directors as a Group (13
Persons) (9)
|
Common
|
70,656,192
|
11.35
|
%
|
(1)
|
Applicable
percentage of ownership is based on 588,888,574 shares of common
stock
outstanding as of June 30, 2006, together with applicable options
and
warrants for each shareholder. Beneficial ownership is determined
in
accordance with the rules of the Securities and Exchange Commission
and
generally includes voting or investment power with respect to securities.
Shares of Common
Stock
subject to options and warrants that are currently exercisable or
exercisable within 60 days of June 30, 2006 are deemed to be beneficially
owned by the person holding such options for the purpose of computing
the
percentage of ownership of such person, but are not treated as outstanding
for the purpose of computing the percentage ownership of any other
person.
|
(2)
|
Mr.
Walter J. Olson, III, Vice President and Chief Investment Officer,
1401
Livingston Lane, Jackson, MS 39213, has dispositive power over the
shares
held by Southern Farm Bureau Life Insurance
Company.
|
(3)
|
Includes
6,450,000 shares of our Common Stock; 16,000,000 shares of Common
Stock
issuable upon the exercise of a warrants to purchase our common stock;
and
a limited number of shares (8,150,000 shares) of our Common
Stock
issuable upon the conversion of a $15.1 million convertible debenture
held
by Cornell Capital. 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%.
Mr. Mark
Angelo, Portfolio Manager, has
dispositive power over the shares held by Cornell Capital Partners,
LP,
located at 101 Hudson Street, Suite 3700, Jersey City, New Jersey
07302.
|
|
(4)
|
Includes
302,000 shares of our Common Stock and 17,606,742 shares of Common
Stock
issuable upon the exercise of warrants to purchase our Common
Stock.
|
|
(5)
|
Includes
10,001,856 shares of our Common Stock and 3,190,789 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 and 1,977,568 shares of Common
Stock
issuable upon the exercise of options and warrants to purchase our
Common
Stock.
|
|
(7)
|
Includes
shares of Common Stock issuable upon the exercise of warrants to
purchase
our Common Stock.
|
(8)
|
Includes
111,500 shares of our Common Stock and 1,209,091 shares of our Common
Stock issuable upon the exercise of warrants to purchase shares of
our
Common Stock.
|
(9)
|
Includes
37,114,509 shares of our Common Stock and 33,541,683 shares of Common
Stock issuable upon the exercise of options and warrants to purchase
our
Common Stock.
|
|
|
Price
Per Share
|
||||||
|
High
|
Low
|
|||||
2004
|
|||||||
April
1, 2004 - June 30, 2004
|
$
|
0.28
|
$
|
0.10
|
|||
July
1, 2004 - September 30, 2004
|
$
|
0.27
|
$
|
0.14
|
|||
October
1, 2004 - December 31, 2004
|
$
|
0.24
|
$
|
0.15
|
|||
2005
|
|||||||
January
1, 2005 - March 31, 2005
|
$
|
0.24
|
$
|
0.17
|
|||
April
1, 2005 - June 30, 2005
|
$
|
0.38
|
$
|
0.15
|
|||
July
1, 2005 - September 30, 2005
|
$
|
0.36
|
$
|
0.24
|
|||
October
1, 2005 - December 31, 2005
|
$
|
0.26
|
$
|
0.17
|
|||
2006
|
|||||||
January
1, 2006 - March 31, 2006
|
$
|
0.30
|
$
|
0.18
|
|||
April
1, 2006 - June 30, 2006
|
$
|
0.24
|
$
|
0.18
|
|||
July
1, 2006 - August 4, 2006
|
$
|
0.18
|
$
|
0.11
|
Page(s)
|
||||
Consensed
Consolidated Balance Sheets as of March 31, 2006 and June 30, 2006
|
F-1
to F-2
|
|||
Condensed
Consolidated Statements of Operations for the Three Months Ended
June 30, 2005 and 2006
|
F-3
|
|||
Condensed
Consolidated Statements of Cash Flows for the Three Months Ended
June
30, 2005 and 2006
|
F-4
to F-5
|
|||
Notes
to Condensed Consolidated Financial Statements
|
F-6
to F-17
|
|||
Report
of Independent Registered Public Accounting Firm
|
F-18
|
|||
Consolidated
Balance Sheets as of March 31, 2005 and 2006
|
F-19
to F-20
|
|||
Consolidated
Statements of Operations for the Years Ended
March 31, 2005 and 2006
|
F-21
|
|||
Consolidated
Statements of Changes in Stockholders’ Equity for
the Years Ended March 31, 2005 and 2006
|
F-22
|
|||
Consolidated
Statements of Cash Flows for the Years Ended March
31, 2005 and 2006
|
F-23
to F-24
|
|||
Notes
to Consolidated Financial Statements
|
F-25
|
ASSETS
|
|||||||
March
31,
|
June
30,
|
||||||
2006
|
2006
|
||||||
(unaudited)
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash and cash equivalents
|
$
|
5,397,881
|
$
|
4,398,979
|
|||
Restricted cash
|
352,200
|
1,102,200
|
|||||
Accounts receivable, net
|
10,481,632
|
9,167,486
|
|||||
Prepaid expenses and other current assets
|
3,399,864
|
3,074,897
|
|||||
Total Current Assets
|
19,631,577
|
17,743,562
|
|||||
FIXED
ASSETS, NET OF ACCUMULATED DEPRECIATION
|
15,859,254
|
18,515,616
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill, net of impairment
|
47,788,167
|
47,749,778
|
|||||
Customer contracts and relationships, net of amortization
|
8,777,502
|
8,450,829
|
|||||
Deferred financing fees, net of amortization
|
146,667
|
-
|
|||||
Other assets
|
1,787,886
|
1,749,058
|
|||||
58,500,222
|
57,949,665
|
||||||
TOTAL
ASSETS
|
$
|
93,991,053
|
$
|
94,208,843
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
(CONTINUED)
|
|||||||
March
31,
|
June
30,
|
||||||
2006
|
2006
|
||||||
(unaudited)
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Current portion of convertible debenture
|
$
|
4,500,000
|
$
|
11,000,000
|
|||
Current portion of long-term debt and notes payable
|
4,269,519
|
1,254,350
|
|||||
Accounts payable and accrued expenses
|
17,402,911
|
15,680,090
|
|||||
Deferred revenue
|
4,343,754
|
4,995,976
|
|||||
Total Current Liabilities
|
30,516,184
|
32,930,416
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Convertible debenture, net of unamortized debt discount
and
|
|||||||
current portion
|
9,995,243
|
3,830,650
|
|||||
Notes payable and other long-term liabilities, net of current
maturities
|
650,419
|
1,863,184
|
|||||
Total Long-Term Liabilities
|
10,645,662
|
5,693,834
|
|||||
TOTAL
LIABILITIES
|
41,161,846
|
38,624,250
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred stock, $.001 par value, 20,035,425 shares
authorized,
|
|||||||
35,378 shares issued and outstanding at March 31, 2006 and June 30,
2006
|
35
|
35
|
|||||
Common stock, $.001 par value, 1,500,000,000 shares authorized,
|
|||||||
560,666,950 and 588,888,574 shares issued and outstanding
|
|||||||
at March 31, 2006 and June 30, 2006
|
560,667
|
588,889
|
|||||
Additional paid-in capital
|
83,641,462
|
91,106,133
|
|||||
Accumulated deficit
|
(31,372,957
|
)
|
(36,110,464
|
)
|
|||
Total Stockholders' Equity
|
52,829,207
|
55,584,593
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
93,991,053
|
$
|
94,208,843
|
For
the Three Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2006
|
||||||
REVENUES
|
$
|
22,505,845
|
$
|
23,342,786
|
|||
OPERATING
COSTS AND EXPENSES
|
|||||||
Cost
of services (exclusive of depreciation and amortization)
|
11,021,862
|
12,761,958
|
|||||
Payroll, professional fees and related expenses
|
3,693,560
|
7,669,173
|
|||||
Advertising and marketing expenses
|
518,664
|
162,618
|
|||||
Office rent and expenses
|
429,941
|
539,584
|
|||||
Other general and administrative expenses
|
4,668,075
|
3,675,493
|
|||||
Depreciation and amortization
|
822,377
|
1,330,911
|
|||||
Stock compensation
|
-
|
485,091
|
|||||
Goodwill impairment charges
|
-
|
348,118
|
|||||
Restructuring charges
|
-
|
303,671
|
|||||
Total Operating Costs and Expenses
|
21,154,479
|
27,276,617
|
|||||
OPERATING
INCOME/(LOSS)
|
1,351,366
|
(3,933,831
|
)
|
||||
INTEREST
EXPENSE, NET
|
(932,175
|
)
|
(394,075
|
)
|
|||
LOSS
ON EXTINGUISHMENT OF DEBT
|
-
|
(409,601
|
)
|
||||
NET
INCOME/(LOSS) BEFORE PROVISION FOR INCOME TAXES
|
419,191
|
(4,737,507
|
)
|
||||
Provision for Income Taxes
|
-
|
-
|
|||||
NET
INCOME/(LOSS) APPLICABLE TO COMMON SHARES
|
$
|
419,191
|
$
|
(4,737,507
|
)
|
||
NET
INCOME/(LOSS) PER SHARE
|
|||||||
Basic
|
$
|
0.0012
|
$
|
(0.0082
|
)
|
||
Diluted
|
$
|
0.0010
|
$
|
(0.0082
|
)
|
||
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||
SHARES OUTSTANDING
|
360,778,231
|
580,059,290
|
For
the Three Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net income/(loss)
|
$
|
419,191
|
$
|
(4,737,507
|
)
|
||
Items that reconcile net income/(loss) to net
cash
|
|||||||
(used in) operating activities:
|
|||||||
Depreciation and amortization
|
822,377
|
1,330,911
|
|||||
Noncash interest expense and loss on debt extinguishment
|
145,433
|
644,535
|
|||||
Goodwill impairment charges
|
-
|
348,118
|
|||||
Restructuring charges
|
-
|
303,671
|
|||||
Common stock issued for services
|
15,000
|
521,091
|
|||||
Changes in assets and liabilities
|
|||||||
(Increase) decrease in accounts receivable
|
(65,920
|
)
|
1,314,146
|
||||
Decrease in other current assets
|
53,665
|
324,968
|
|||||
(Increase) in other assets
|
(216,906
|
)
|
(263,151
|
)
|
|||
(Decrease) in accounts payable and
|
|||||||
and accrued expenses
|
(2,542,829
|
)
|
(1,876,842
|
)
|
|||
Increase in deferred revenue
|
19,933
|
418,000
|
|||||
(1,769,247
|
)
|
3,065,447
|
|||||
Net cash (used in) operating activities
|
(1,350,056
|
)
|
(1,672,060
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Proceeds from the sale/leaseback of wireless network
equipment
|
-
|
2,000,000
|
|||||
Purchase of certificates of deposit
|
-
|
(750,000
|
)
|
||||
Capital expenditures, net
|
(579,724
|
)
|
(3,523,219
|
)
|
|||
Acquisition of intangible assets
|
(6,778,129
|
)
|
(37,167
|
)
|
|||
Cash paid for acquisitions
|
(2,024,646
|
)
|
-
|
||||
Net cash (used in) investing activities
|
(9,382,499
|
)
|
(2,310,386
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Net proceeds from common stock issuances
|
7,485,000
|
6,661,669
|
|||||
Borrowings/(payments) under other notes payable, net
|
(1,313,276
|
)
|
(3,678,125
|
)
|
|||
Proceeds from the issuance of the convertible debenture
|
15,500,000
|
-
|
|||||
Retirement of acquisition bridge loan
|
(13,000,000
|
)
|
-
|
||||
Investment by minority interests
|
3,675,000
|
-
|
|||||
Debt financing fees
|
(1,295,000
|
)
|
-
|
||||
Net cash provided by financing activities
|
11,051,724
|
2,983,544
|
For
the Three Months Ended
|
|||||||
June
30,
|
|||||||
2005
|
2006
|
||||||
NET
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
|
$
|
319,169
|
$
|
(998,902
|
)
|
||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
4,669,787
|
5,397,881
|
|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
4,988,956
|
$
|
4,398,979
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|||||||
INFORMATION:
|
|||||||
Cash paid during the period for interest
|
$
|
1,035,219
|
$
|
1,006,018
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH
|
|||||||
ACTIVITIES:
|
|||||||
Capital lease
|
$
|
-
|
$
|
1,875,721
|
|||
Amortization of SEDA deferred financing fees
|
$
|
220,000
|
$
|
147,000
|
|||
Goodwill recorded in acquisitions
|
$
|
3,409,158
|
$
|
-
|
|||
Liability for common stock to be issued
|
$
|
1,809,373
|
$
|
-
|
|||
Adjustment to minority interest
|
$
|
150,000
|
$
|
-
|
|||
Issuance of common stock for the acquisition of
WazAlliance
|
$
|
110,200
|
$
|
-
|
|
Estimated
Useful
Lives
(in years)
|
March
31,
2006
|
June
30,
2006
|
|||||||
(unaudited)
|
||||||||||
Furniture
and fixtures
|
7
|
$
|
698,828
|
$
|
886,547
|
|||||
Machinery
and equipment
|
5
|
20,561,029
|
23,831,849
|
|||||||
Leasehold
improvements
|
7
|
788,610
|
786,687
|
|||||||
Vehicles
|
5
|
204,205
|
203,705
|
|||||||
Subtotals
|
22,252,672
|
25,708,788
|
||||||||
Less
accumulated depreciation
|
(6,393,418
|
)
|
(7,193,172
|
)
|
||||||
Fixed
assets, net
|
$
|
15,859,254
|
|
$
|
18,515,616
|
|
March
31, 2006
|
June
30, 2006
|
|||||
|
(unaudited)
|
||||||
Accounts
payable
|
$
|
10,229,960
|
$
|
9,808,832
|
|||
Accrued
location usage fees
|
2,271,060
|
2,149,972
|
|||||
Accrued
restructuring costs
|
486,311
|
746,757
|
|||||
Accrued
compensation
|
1,048,027
|
751,567
|
|||||
Accrued
interest expense
|
873,206
|
2,451
|
|||||
Other
accrued liabilities
|
2,494,347
|
2,220,511
|
|||||
Totals
|
$
|
17,402,911
|
$
|
15,680,090
|
Amended
Debenture issued to Cornell Capital
|
$
|
15,149,650
|
||
Capital
leases
|
1,991,580
|
|||
Notes
payable related to acquisitions
|
42,909
|
|||
Other
notes payable and long-term obligations
|
1,083,045
|
|||
|
18,267,184
|
|||
Less:
Unamortized debt discount on the Amended Debenture
|
(319,000
|
)
|
||
Less:
Amounts due within one year
|
(12,254,350
|
)
|
||
Long-term
portion of debt
|
$
|
5,693,834
|
The
twelve months ending --
|
||||
June
30, 2008
|
$
|
5,146,425
|
||
June
30, 2009
|
862,210
|
|||
June
30, 2010
|
4,199
|
|||
|
6,012,834
|
|||
Less
- Unamortized debt discount on the Amended Debenture
|
(319,000
|
)
|
||
Long-term
portion of debt
|
$
|
5,693,834
|
|
|
||||||
Stock
Options --
|
Number
of Options
|
Weighted-Average Exercise
Price |
|||||
Outstanding
– March 31, 2006
|
11,076,000
|
$
|
0.2260
|
||||
Granted
|
-
|
$
|
-
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
-
|
$
|
-
|
||||
Outstanding
– June 30, 2006
|
11,076,000
|
$
|
0.2260
|
||||
Exercisable
– June 30, 2006
|
4,854,759
|
$
|
0.2302
|
|
|
||||||
Stock
Warrants --
|
Number
of Warrants
|
Weighted-Average Exercise
Price |
|||||
Outstanding
– March 31, 2006
|
94,932,500
|
$
|
0.1669
|
||||
Granted
|
10,250,000
|
$
|
0.2732
|
||||
Exercised
|
(6,021,524
|
)
|
$
|
0.0180
|
|||
Cancelled
|
(478,476
|
)
|
$
|
0.0180
|
|||
Outstanding
– June 30, 2006
|
98,682,500
|
$
|
0.1877
|
||||
Exercisable
– June 30, 2006
|
81,869,834
|
$
|
0.1849
|
2005
|
|||||||||||||||||||||||||||||||
Net
income, as reported
|
$
|
419,191
|
|||||||||||||||||||||||||||||
Add:
Stock-based employee compensation expense included in reported net
income
|
-
|
||||||||||||||||||||||||||||||
Deduct:
Total stock-based employee compensation expense determined under
fair
value based method for all awards
|
(1,820,768
|
)
|
|||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||
Pro
forma net loss
|
$
|
(1,401,577
|
)
|
||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||
Net
income per share:
|
|||||||||||||||||||||||||||||||
Diluted, as reported
|
$
|
0.0010
|
|||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||
Diluted, pro forma
|
$
|
(0.0034
|
)
|
|
2005
|
2006
|
|||||
Dividend
yield
|
-
|
%
|
-
|
%
|
|||
Expected
volatility
|
60
|
%
|
60
|
%
|
|||
Risk-free
interest rate
|
3.00
|
%
|
4.00
|
%
|
|||
Expected
term (in years)
|
10.00
|
10.00
|
Net
income
|
$
|
419,191
|
||
Weighted
average number of shares outstanding during the period
|
360,778,231
|
|||
Add:
the treasury stock effect of stock options and warrants
|
39,571,209
|
|||
Add: the effect of the assumed conversion of SEDA notes payable to
common
stock
|
11,157,620
|
|||
Add: the effects of the assumed conversion of the Debenture and notes
payable
|
1,941,180
|
|||
|
||||
Diluted
number of shares outstanding
|
413,448,241
|
|||
|
||||
Net
income per share:
|
||||
Basic
|
$
|
0.0012
|
||
Diluted
|
$
|
0.0010
|
|
Voice
|
Internet
|
Wireless
|
|||||||||||||
2005
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
18,462,451
|
$
|
4,037,400
|
$
|
5,994
|
$
|
-
|
$
|
22,505,845
|
||||||
Cost
of revenues (excludes depreciation and amortization)
|
9,054,032
|
1,956,024
|
11,806
|
-
|
11,021,862
|
|||||||||||
Other
operating expenses
|
6,940,911
|
1,752,806
|
227,949
|
388,574
|
9,310,240
|
|||||||||||
Depreciation
and amortization
|
736,543
|
81,799
|
388
|
3,647
|
822,377
|
|||||||||||
Interest
expense, net
|
549
|
18,464
|
(74
|
)
|
913,236
|
932,175
|
||||||||||
Net
income (loss)
|
$
|
1,730,416
|
$
|
228,307
|
$
|
(234,075
|
)
|
$
|
(1,305,457
|
)
|
$
|
419,191
|
||||
Segment
assets
|
$
|
56,380,842
|
$
|
17,960,916
|
$
|
8,082,405
|
$
|
2,778,615
|
$
|
85,202,778
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,729,485
|
$
|
1,366,679
|
$
|
257,127
|
$
|
3,645
|
$
|
13,356,936
|
||||||
Goodwill,
net of impairment
|
$
|
22,709,478
|
$
|
13,986,759
|
$
|
494,219
|
$
|
-
|
$
|
37,190,456
|
Voice
|
Internet
|
Wireless
|
|
|
||||||||||||
2006
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
16,084,041
|
$
|
4,220,433
|
$
|
3,038,312
|
$
|
-
|
$
|
23,342,786
|
||||||
Cost
of revenues (excludes depreciation and amortization)
|
8,978,573
|
1,980,462
|
1,802,923
|
-
|
12,761,958
|
|||||||||||
Other
operating expenses
|
6,983,699
|
2,190,690
|
2,030,287
|
1,736,881
|
12,941,557
|
|||||||||||
Depreciation
and amortization
|
823,690
|
111,797
|
395,424
|
-
|
1,330,911
|
|||||||||||
Goodwill
impairment charges
|
-
|
348,118
|
-
|
-
|
348,118
|
|||||||||||
Restructuring
charges
|
-
|
22,036
|
-
|
281,635
|
303,671
|
|||||||||||
Interest
expense, net
|
(133,388
|
)
|
582
|
(13,759
|
)
|
540,643
|
394,078
|
|||||||||
Net
income (loss)
|
$
|
(568,533
|
)
|
$
|
(433,252
|
)
|
$
|
(1,176,563
|
)
|
$
|
(2,559,159
|
)
|
$
|
(4,737,507
|
)
|
|
|
||||||||||||||||
Segment
assets
|
$
|
47,236,418
|
$
|
17,604,384
|
$
|
28,477,183
|
$
|
890,858
|
$
|
94,208,843
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
10,921,588
|
$
|
1,505,093
|
$
|
6,088,935
|
$
|
-
|
$
|
18,515,616
|
||||||
Goodwill,
net of impairment
|
$
|
20,531,278
|
$
|
15,142,567
|
$
|
12,075,933
|
$
|
-
|
$
|
47,749,778
|
ASSETS
|
|||||||
2005
|
2006
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
4,669,787
|
$
|
5,397,881
|
|||
Restricted
cash
|
429,954
|
352,200
|
|||||
Accounts
receivable, net
|
12,658,313
|
10,481,632
|
|||||
Prepaid
expenses and other current assets
|
2,511,697
|
3,399,864
|
|||||
Total
Current Assets
|
20,269,751
|
19,631,577
|
|||||
FIXED
ASSETS, NET OF ACCUMULATED DEPRECIATION
|
13,193,056
|
15,859,254
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill,
net of impairment
|
32,579,099
|
47,788,167
|
|||||
Customer
contracts and relationships, net of amortization
|
2,965,456
|
8,777,502
|
|||||
Other
intangible assets, net of amortization
|
1,511,005
|
449,999
|
|||||
Deferred
financing fees, net of amortization
|
1,026,667
|
146,667
|
|||||
Other
assets
|
1,277,897
|
1,337,887
|
|||||
39,360,124
|
58,500,222
|
||||||
TOTAL
ASSETS
|
$
|
72,822,931
|
$
|
93,991,053
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
2005
|
2006
|
||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of convertible debenture
|
$
|
—
|
$
|
4,500,000
|
|||
Notes
payable
|
25,535,263
|
3,964,959
|
|||||
Accounts
payable and accrued expenses
|
19,863,088
|
17,707,471
|
|||||
Deferred
revenue
|
3,470,731
|
4,343,754
|
|||||
Total
Current Liabilities
|
48,869,082
|
30,516,184
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Convertible
debenture, net of unamortized debt discount and
|
|||||||
current
portion
|
—
|
9,995,243
|
|||||
Notes
payable and other long-term liabilities, net of current
maturities
|
999,196
|
650,419
|
|||||
Total
Long-Term Liabilities
|
999,196
|
10,645,662
|
|||||
TOTAL
LIABILITIES
|
49,868,278
|
41,161,846
|
|||||
MINORITY
INTERESTS
|
600,000
|
—
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock, $.001 par value, 20,035,425 shares authorized,
|
|||||||
35,378
shares issued and outstanding at March 31, 2005 and 2006
|
35
|
35
|
|||||
Common
stock, $.001 par value, 1,500,000,000 shares authorized,
|
|||||||
355,918,011
and 560,666,949 shares issued and outstanding
|
|||||||
at
March 31, 2005 and 2006
|
355,918
|
560,667
|
|||||
Additional
paid-in capital
|
43,195,250
|
83,641,462
|
|||||
Accumulated
deficit
|
(21,196,550
|
)
|
(31,372,957
|
)
|
|||
Total
Stockholders' Equity
|
22,354,653
|
52,829,207
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
72,822,931
|
$
|
93,991,053
|
|||
2005
|
2006
|
||||||
REVENUES
|
$
|
46,508,144
|
$
|
99,013,467
|
|||
OPERATING
COSTS AND EXPENSES
|
|||||||
Cost
of services (exclusive of depreciation and amortization)
|
22,551,240
|
49,082,244
|
|||||
Payroll,
professional fees and related expenses
|
12,586,034
|
19,496,724
|
|||||
Advertising
and marketing expenses
|
1,610,285
|
3,067,702
|
|||||
Office
rent and expenses
|
952,475
|
2,285,139
|
|||||
Other
general and administrative expenses
|
10,262,056
|
21,646,277
|
|||||
Depreciation
and amortization
|
2,067,213
|
4,310,742
|
|||||
Goodwill
impairment charges
|
—
|
4,446,544
|
|||||
Settlement
of litigation and other claims
|
—
|
1,077,000
|
|||||
Restructuring
charges
|
—
|
825,703
|
|||||
Total
Operating Costs and Expenses
|
50,029,303
|
106,238,075
|
|||||
OPERATING
LOSS
|
(3,521,159
|
)
|
(7,224,608
|
)
|
|||
INTEREST
EXPENSE, NET
|
(1,838,563
|
)
|
(2,838,394
|
)
|
|||
MINORITY
INTERESTS IN NET INCOME OF
|
|||||||
CONSOLIDATED
SUBSIDIARIES
|
—
|
(113,405
|
)
|
||||
NET
LOSS BEFORE PROVISION FOR INCOME TAXES
|
(5,359,722
|
)
|
(10,176,407
|
)
|
|||
Provision
for Income Taxes
|
—
|
—
|
|||||
NET
LOSS APPLICABLE TO COMMON SHARES
|
$
|
(5,359,722
|
)
|
$
|
(10,176,407
|
)
|
|
NET
LOSS PER SHARE
|
|||||||
Basic
|
$
|
(0.0185
|
)
|
$
|
(0.0248
|
)
|
|
Diluted
|
$
|
(0.0185
|
)
|
$
|
(0.0248
|
)
|
|
WEIGHTED
AVERAGE NUMBER OF COMMON
|
|||||||
SHARES
OUTSTANDING
|
289,933,904
|
411,157,718
|
|||||
Additional
|
||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Accumulated
|
Stockholders'
|
||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||
BALANCE
- MARCH 31, 2004
|
35,378
|
$
|
35
|
220,493,159
|
$
|
220,493
|
$
|
15,902,619
|
$
|
(15,836,828
|
)
|
$
|
286,319
|
|||||||||
Shares
issued under the $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
|
—
|
—
|
2,446,037
|
2,446
|
82,053
|
—
|
84,499
|
|||||||||||||||
Shares
issued for consulting services
|
—
|
—
|
600,000
|
600
|
30,400
|
—
|
31,000
|
|||||||||||||||
Shares
issued in acquisition of ShreveNet, Inc.
|
—
|
—
|
878,816
|
879
|
189,121
|
—
|
190,000
|
|||||||||||||||
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 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 the $100 million Standby Equity Distribution
Agreement
|
—
|
—
|
65,000,000
|
65,000
|
9,282,366
|
—
|
9,347,366
|
|||||||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
—
|
(5,359,722
|
)
|
(5,359,722
|
)
|
|||||||||||||
BALANCE
- MARCH 31, 2005
|
35,378
|
35
|
355,918,011
|
355,918
|
43,195,250
|
(21,196,550
|
)
|
22,354,653
|
||||||||||||||
Shares
issued under the $100 million Standby Equity Distribution
Agreement
|
—
|
—
|
95,000,000
|
95,000
|
22,055,740
|
—
|
22,150,740
|
|||||||||||||||
Issuance
of warrant in connection with convertible debenture
|
—
|
—
|
—
|
—
|
853,200
|
—
|
853,200
|
|||||||||||||||
Financing
fee related to convertible debenture
|
—
|
—
|
—
|
—
|
(1,295,000
|
)
|
—
|
(1,295,000
|
)
|
|||||||||||||
Shares
issued for consulting and investment banking services
|
—
|
—
|
447,172
|
447
|
82,053
|
—
|
82,500
|
|||||||||||||||
Acquisition
of WazAlliance
|
—
|
—
|
933,334
|
933
|
134,400
|
—
|
135,333
|
|||||||||||||||
Acquisition
of Evergreen Broadband
|
—
|
—
|
1,505,360
|
1,505
|
229,568
|
—
|
231,073
|
|||||||||||||||
Acquisition
of AFN
|
—
|
—
|
10,000,000
|
10,000
|
1,490,000
|
—
|
1,500,000
|
|||||||||||||||
Acquisition
of InReach Internet
|
—
|
—
|
3,669,725
|
3,670
|
796,330
|
—
|
800,000
|
|||||||||||||||
Acquisition
of Kite Broadband and Kite Networks
|
—
|
—
|
90,000,000
|
90,000
|
15,570,000
|
—
|
15,660,000
|
|||||||||||||||
Settlement
with former owners of Affinity Telecom
|
—
|
—
|
(1,685,000
|
)
|
(1,685
|
)
|
(335,315
|
)
|
—
|
(337,000
|
)
|
|||||||||||
Common
stock registration costs
|
—
|
—
|
—
|
—
|
(34,419
|
)
|
—
|
(34,419
|
)
|
|||||||||||||
Conversion
of notes payable and debentures
|
—
|
—
|
4,046,732
|
4,047
|
900,487
|
—
|
904,534
|
|||||||||||||||
Exercise
of common stock warrant
|
—
|
—
|
831,615
|
832
|
(832
|
)
|
—
|
—
|
||||||||||||||
Net
loss for the year
|
—
|
—
|
—
|
—
|
—
|
(10,176,407
|
)
|
(10,176,407
|
)
|
|||||||||||||
BALANCE
- MARCH 31, 2006
|
35,378
|
$
|
35
|
560,666,949
|
$
|
560,667
|
$
|
83,641,462
|
$
|
(31,372,957
|
)
|
$
|
52,829,207
|
|||||||||
2005
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
loss
|
$
|
(5,359,722
|
)
|
$
|
(10,176,407
|
)
|
|
Adjustments
to reconcile net loss to net cash
|
|||||||
provided
by (used in) operating activities:
|
|||||||
Goodwill
impairment charges
|
—
|
4,446,544
|
|||||
Depreciation
and amortization
|
2,067,213
|
4,310,742
|
|||||
Restructuring
charges
|
—
|
825,703
|
|||||
Noncash
interest expense
|
375,150
|
752,565
|
|||||
Minority
interests
|
—
|
113,405
|
|||||
Investments
received for services
|
(450,000
|
)
|
—
|
||||
Other
|
31,000
|
32,019
|
|||||
Changes
in assets and liabilities
|
|||||||
(Increase)
decrease in accounts receivable
|
(307,335
|
)
|
2,356,109
|
||||
(Increase)
decrease in other current assets
|
916,786
|
(658,878
|
)
|
||||
(Increase)
in other assets
|
(384,910
|
)
|
(767,296
|
)
|
|||
Increase
(decrease) in accounts payable and
|
|||||||
and
accrued expenses
|
3,141,501
|
(4,038,760
|
)
|
||||
Increase
(decrease) in deferred revenue
|
609,979
|
(54,635
|
)
|
||||
5,999,384
|
7,317,518
|
||||||
Net
cash provided by (used in) operating activities
|
639,662
|
(2,858,889
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Acquisition
of intangible assets
|
(1,192,608
|
)
|
(6,778,129
|
)
|
|||
Cash
paid for acquisitions
|
(32,960,500
|
)
|
(4,297,252
|
)
|
|||
Cash
received in acquisition of subsidiaries
|
5,827,223
|
314,124
|
|||||
Capital
expenditures, net
|
(2,109,338
|
)
|
(4,814,174
|
)
|
|||
Net
cash (used in) investing activities
|
(30,435,223
|
)
|
(15,575,431
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Proceeds
from common stock issuances
|
13,098,406
|
22,616,456
|
|||||
Proceeds
from the issuance of the convertible debenture
|
—
|
15,500,000
|
|||||
Retirement
of acquisition bridge loan
|
—
|
(13,000,000
|
)
|
||||
Borrowings/(payments)
under other notes payable, net
|
19,411,335
|
(8,271,567
|
)
|
||||
Investment
by minority interests
|
—
|
3,612,525
|
|||||
Debt
financing fees
|
—
|
(1,295,000
|
)
|
||||
Net
cash provided by financing activities
|
32,509,741
|
19,162,414
|
|||||
2005
|
2006
|
||||||
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
$
|
2,714,180
|
$
|
728,094
|
|||
CASH
AND CASH EQUIVALENTS - BEGINNING OF YEAR
|
1,955,607
|
4,669,787
|
|||||
CASH
AND CASH EQUIVALENTS - END OF YEAR
|
$
|
4,669,787
|
$
|
5,397,881
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|||||||
INFORMATION:
|
|||||||
Cash
paid during the year for interest
|
$
|
533,050
|
$
|
1,651,670
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH
|
|||||||
ACTIVITIES:
|
|||||||
Issuance
of common stock for:
|
|||||||
Acquisition
of Kite Broadband
|
$
|
—
|
$
|
15,660,000
|
|||
Acquisition
of AFN
|
$
|
—
|
$
|
1,500,000
|
|||
Acquisition
of InReach
|
$
|
—
|
$
|
800,000
|
|||
Acquisition
of Evergreen
|
$
|
—
|
$
|
231,073
|
|||
Acquisition
of WazAlliance
|
$
|
—
|
$
|
135,333
|
|||
Investment
banker retainer fee
|
$
|
—
|
$
|
58,500
|
|||
Debt
financing fees paid in common stock
|
$
|
1,760,000
|
$
|
—
|
|||
Goodwill
recorded in acquisitions
|
$
|
32,785,618
|
$
|
18,336,791
|
|||
Amortization
of SEDA deferred financing fees
|
$
|
—
|
$
|
880,000
|
|||
Liability
for common stock to be issued
|
$
|
300,000
|
$
|
53,167
|
|||
Assignment
of bridge debentures receivable
|
$
|
1,000,000
|
$
|
—
|
|||
Adjustment
to minority interest
|
$
|
—
|
$
|
150,000
|
|||
|
Estimated
Useful
Lives
(in years)
|
2005
|
2006
|
|||||||
Furniture
and fixtures
|
7
|
$
|
387,861
|
$
|
698,828
|
|||||
Machinery
and equipment
|
5
|
13,584,088
|
20,561,029
|
|||||||
Leasehold
improvements
|
7
|
263,452
|
788,610
|
|||||||
Vehicles
|
5
|
287,733
|
204,205
|
|||||||
Subtotals
|
14,523,134
|
22,252,672
|
||||||||
Less
accumulated depreciation
|
(
1,330,078
|
)
|
(6,393,418
|
)
|
||||||
Fixed
assets, net
|
$
|
13,193,056
|
$
|
15,859,254
|
|
2005
|
2006
|
|||||
Accounts
payable
|
$
|
10,320,246
|
$
|
10,534,520
|
|||
Accrued
location usage fees
|
3,763,596
|
2,271,060
|
|||||
Accrued
restructuring costs
|
-
|
486,311
|
|||||
Accrued
compensation
|
2,147,138
|
1,048,027
|
|||||
Accrued
interest expense
|
937,509
|
873,206
|
|||||
Other
accrued liabilities
|
2,694,599
|
2,494,347
|
|||||
Totals
|
$
|
19,863,088
|
$
|
17,707,471
|
|
Years
Ended March
31,
|
||||||
|
2005
|
2006
|
|||||
Revenues
|
$
|
52,896,981
|
$
|
100,576,235
|
|||
Net
loss
|
$
|
(4,989,377
|
)
|
$
|
(10,066,236
|
)
|
|
Net
loss per share:
|
|||||||
Basic
|
$
|
(0.0166
|
)
|
$
|
(0.0243
|
)
|
|
Diluted
|
$
|
(0.0166
|
)
|
$
|
(0.0243
|
)
|
|
Weighted
average shares outstanding
|
299,933,904
|
413,657,718
|
|
Years
Ended March
31,
|
||||||
|
2005
|
2006
|
|||||
Revenues
|
$
|
53,308,370
|
$
|
102,530,053
|
|||
Net
loss
|
$
|
(5,225,053
|
)
|
$
|
(9,867,438
|
)
|
|
Net
loss per share:
|
$
|
||||||
Basic
|
$
|
(0.0178
|
)
|
(0.0239
|
)
|
||
Diluted
|
$
|
(0.0178
|
)
|
$
|
(0.0239
|
)
|
|
Weighted
average shares outstanding
|
293,603,629 | 413,298,391 |
Convertible
debenture payable to Cornell Capital
|
$
|
15,000,000
|
||
Notes
payable to Cornell Capital
|
3,600,000
|
|||
Notes
payable related to acquisitions
|
29,619
|
|||
Other
notes payable and long-term obligations
|
1,338,427
|
|||
|
19,968,046
|
|||
Less:
Unamortized debt discount on convertible debenture
|
(504,756
|
)
|
||
Less:
Amounts due within one year
|
(8,817,628
|
)
|
||
Long-term
portion of debt
|
$
|
10,645,662
|
The
year ending —
|
|
|||
March
31, 2008
|
$
|
8,433,377
|
||
March
31, 2009
|
2,712,842
|
|||
March
31, 2010
|
4,199
|
|||
|
11,150,418
|
|||
Less
- Unamortized debt discount on convertible debenture
|
(504,756
|
)
|
||
Long-term
portion of debt
|
$
|
10,645,662
|
|
Years
Ended March
31,
|
||||||
|
2005
|
2006
|
|||||
Statutory
federal income tax rate
|
(35.0
|
)%
|
(35.0
|
)%
|
|||
State
income taxes, net of federal benefit
|
(3.0
|
)
|
(3.0
|
)
|
|||
Permanent
differences
|
0.2
|
16.9
|
|||||
Tax
credits
|
-
|
-
|
|||||
Change
in valuation allowance
|
37.8
|
21.1
|
|||||
Effective
tax rate
|
-
|
%
|
-
|
%
|
|
March
31,
|
||||||
|
2005
|
2006
|
|||||
Net
operating loss carryforwards
|
$
|
6,033,340
|
$
|
10,657,651
|
|||
Depreciation
|
(50,051
|
)
|
(2,343,846
|
)
|
|||
Other
differences
|
-
|
(175,548
|
)
|
||||
Valuation
allowance
|
(5,983,289
|
)
|
(8,138,257
|
)
|
|||
Total
net deferred tax asset
|
$
|
-
|
$
|
-
|
Stock
Options —
|
Number
of Options
|
Weighted-Average
Exercise
Price
|
|||||
Outstanding
- March 31, 2004
|
4,171,037
|
$
|
0.0482
|
||||
Granted
|
5,225,000
|
$
|
0.1748
|
||||
Exercised
|
(446,037
|
)
|
$
|
0.0594
|
|||
Cancelled
|
(7,225,000
|
)
|
$
|
0.1047
|
|||
Outstanding
- March 31, 2005
|
1,725,000
|
$
|
0.1920
|
||||
Granted
|
9,351,000
|
$
|
0.2330
|
||||
Exercised
|
-
|
$
|
-
|
||||
Cancelled
|
-
|
$
|
-
|
||||
Outstanding
- March 31, 2006
|
11,076,000
|
$
|
0.2260
|
||||
Exercisable
- March 31, 2006
|
4,792,259
|
$
|
0.2301
|
Stock
Warrants —
|
Number
of Warrants
|
Weighted-Average
Exercise Price
|
|||||
Outstanding
- March 31, 2004
|
7,000,000
|
$
|
0.0190
|
||||
Granted
|
61,732,500
|
$
|
0.1326
|
||||
Exercised
|
(2,500,000
|
)
|
$
|
0.0296
|
|||
Cancelled
|
(5,000,000
|
)
|
$
|
0.1900
|
|||
Outstanding
- March 31, 2005
|
61,232,500
|
$
|
0.1172
|
||||
Granted
|
36,700,000
|
$
|
0.2458
|
||||
Exercised
|
(831,615
|
)
|
$
|
0.1700
|
|||
Cancelled
|
(2,168,385
|
)
|
$
|
0.0916
|
|||
Outstanding
- March 31, 2006
|
94,932,500
|
$
|
0.1669
|
||||
Exercisable
- March 31, 2006
|
75,321,123
|
$
|
0.1584
|
Outstanding
Stock Options
|
Exercisable
Options
|
|||||||||||||||
Range
of Exercise Prices
|
Number
Outstanding
|
Weighted
Average Remaining Term (yrs.)
|
Weighted
Average Exercise Price
|
Number
Exercisable
|
Weighted
Average Exercise Price
|
|||||||||||
$0.01
- $0.20
|
800,000
|
7.9
|
$
|
0.12
|
800,000
|
$
|
0.12
|
|||||||||
$0.21
- $0.25
|
7,776,000
|
9.6
|
0.22
|
1,758,926
|
0.22
|
|||||||||||
$0.26
- $0.30
|
2,400,000
|
9.5
|
0.27
|
2,133,333
|
0.27
|
|||||||||||
$0.30
- $0.40
|
100,000
|
5.0
|
0.40
|
100,000
|
0.40
|
|||||||||||
Total
Options
|
11,076,000
|
9.6
|
|
0.23
|
4,792,259
|
|
0.23
|
Outstanding
Warrants
|
Exercisable
Warrants
|
|||||||||||||||
Range
of Exercise Prices
|
Number
Outstanding
|
Weighted
Average Remaining Term (yrs.)
|
Weighted
Average Exercise Price
|
Number
Exercisable
|
Weighted
Average Exercise Price
|
|||||||||||
$0.01
- $0.02
|
30,082,500
|
8.0
|
$
|
0.02
|
29,782,500
|
$
|
0.02
|
|||||||||
$0.03
- $0.09
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
$0.10
- $0.14
|
800,000
|
7.9
|
0.10
|
800,000
|
0.10
|
|||||||||||
$0.15
- $0.16
|
9,300,000
|
8.5
|
0.16
|
7,546,559
|
0.16
|
|||||||||||
$0.17
- $0.19
|
13,750,000
|
9.5
|
0.18
|
6,447,368
|
0.18
|
|||||||||||
$0.20
- $0.21
|
12,900,000
|
7.1
|
0.20
|
12,608,333
|
0.20
|
|||||||||||
$0.22
- $0.23
|
12,600,000
|
9.5
|
0.22
|
3,178,030
|
0.22
|
|||||||||||
$0.24
- $0.50
|
15,500,000
|
4.2
|
0.38
|
14,958,333
|
0.38
|
|||||||||||
Total
Warrants
|
94,932,500
|
7.7
|
|
0.17
|
75,321,123
|
|
0.16
|
|
2005
|
2006
|
|||||
Net
loss, as reported
|
$
|
(5,359,722
|
)
|
$
|
(10,176,407
|
)
|
|
Add:
Stock-based employee compensation expense included in net
loss
|
-
|
-
|
|||||
Deduct:
Total stock-based employee compensation expense determined under
fair
value based method for all awards
|
(1,652,185
|
)
|
(5,467,232
|
)
|
|||
Pro
forma net loss
|
$
|
(7,011,907
|
)
|
$
|
(15,643,639
|
)
|
|
Net
loss per share:
|
|||||||
As
reported
|
$
|
(0.0185
|
)
|
$
|
(0.0248
|
)
|
|
Pro
forma
|
$
|
(0.0242
|
)
|
$
|
(0.0380
|
)
|
|
2005
|
2006
|
|||||
Dividend
yield
|
-
|
%
|
-
|
%
|
|||
Expected
volatility
|
60
|
%
|
60
|
%
|
|||
Risk-free
interest rate
|
3.00
|
%
|
3.00
|
%
|
|||
Expected
term (in years)
|
10.00
|
10.00
|
Years
Ending March
31,
|
Minimum
Lease Payments
|
|||
2007
|
$
|
1,499,853
|
||
2008
|
1,085,611
|
|||
2009
|
665,546
|
|||
2010
|
252,858
|
|||
2011
|
125,315
|
|||
Thereafter
|
-
|
|||
Total
Payments
|
$
|
3,629,183
|
2005
|
Voice
Services
|
Internet
Services
|
Wireless
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
32,009,084
|
$
|
13,884,060
|
$
|
-
|
$
|
615,000
|
$
|
46,508,144
|
||||||
Cost
of revenues (excludes depreciation and amortization)
|
15,816,901
|
6,734,339
|
-
|
-
|
22,551,240
|
|||||||||||
Other
operating expenses
|
16,707,959
|
6,460,970
|
953,976
|
1,287,945
|
25,410,850
|
|||||||||||
Depreciation
and amortization
|
1,093,620
|
225,672
|
14,588
|
733,333
|
2,067,213
|
|||||||||||
Interest
expense, net
|
(87,566
|
)
|
113,944
|
43,927
|
1,768,258
|
1,838,563
|
||||||||||
Net
income (loss)
|
$
|
(1,521,830
|
)
|
$
|
349,135
|
$
|
(1,012,491
|
)
|
$
|
(3,174,536
|
)
|
$
|
(5,359,722
|
)
|
||
Segment
assets
|
$
|
35,166,195
|
$
|
18,119,944
|
$
|
14,240
|
$
|
19,522,552
|
$
|
72,822,931
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,804,050
|
$
|
1,381,713
|
$
|
7,293
|
$
|
-
|
$
|
13,193,056
|
||||||
Goodwill,
net of impairment
|
$
|
18,543,703
|
$
|
14,035,396
|
$
|
-
|
$
|
-
|
$
|
32,579,099
|
2006
|
Voice
Services
|
Internet
Services
|
Wireless
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
72,356,453
|
$
|
16,940,513
|
$
|
9,716,501
|
$
|
-
|
$
|
99,013,467
|
||||||
Cost
of revenues (excludes depreciation and amortization)
|
35,630,090
|
8,267,634
|
5,184,520
|
-
|
49,082,244
|
|||||||||||
Other
operating expenses
|
31,066,030
|
8,026,734
|
6,054,076
|
2,426,002
|
47,572,842
|
|||||||||||
Depreciation
and amortization
|
3,313,401
|
382,167
|
607,881
|
7,293
|
4,310,742
|
|||||||||||
Goodwill
impairment charges
|
1,818,910
|
2,627,634
|
-
|
-
|
4,446,544
|
|||||||||||
Restructuring
charges
|
-
|
825,703
|
-
|
-
|
825,703
|
|||||||||||
Interest
expense, net
|
(13,761
|
)
|
17,973
|
(48,773
|
)
|
2,882,955
|
2,838,394
|
|||||||||
Minority
interests
|
(71,037
|
)
|
-
|
184,442
|
-
|
113,405
|
||||||||||
Net
income (loss)
|
$
|
612,820
|
$
|
(3,207,332
|
)
|
$
|
(2,265,645
|
)
|
$
|
(5,316,250
|
)
|
$
|
(10,176,407
|
)
|
||
|
||||||||||||||||
Segment
assets
|
$
|
50,143,424
|
$
|
18,658,080
|
$
|
23,710,779
|
$
|
1,478,770
|
$
|
93,991,053
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,200,715
|
$
|
1,532,494
|
$
|
3,126,045
|
$
|
-
|
$
|
15,859,254
|
||||||
Goodwill,
net of impairment
|
$
|
20,231,278
|
$
|
15,480,956
|
$
|
12,075,933
|
$
|
-
|
$
|
47,788,167
|
InReach
|
Kite
|
Kite
|
||||||||||||||
AFN
|
Internet
|
Networks
|
Broadband
|
Totals
|
||||||||||||
Acquisition
Cost
|
||||||||||||||||
Cash
|
$
|
1,500,000
|
$
|
2,166,861
|
$
|
—
|
$
|
—
|
$
|
3,666,861
|
||||||
Common
stock
|
1,500,000
|
800,000
|
2,349,000
|
13,311,000
|
17,960,000
|
|||||||||||
Excess
of liabilities assumed over assets acquired
|
434,331
|
—
|
—
|
—
|
434,331
|
|||||||||||
Aggregate
purchase price amounts
|
$
|
3,434,331
|
$
|
2,966,861
|
$
|
2,349,000
|
$
|
13,311,000
|
$
|
22,061,192
|
||||||
Number
of Shares Issued
|
10,000,000
|
3,669,725
|
13,500,000
|
76,500,000
|
103,669,725
|
|||||||||||
Net
Assets of Acquired Companies
|
||||||||||||||||
Aggregate
purchase price amounts
|
$
|
3,434,331
|
$
|
2,966,861
|
$
|
2,349,000
|
$
|
13,311,000
|
$
|
22,061,192
|
||||||
Excess
of liabilities assumed over assets acquired
|
(434,331
|
)
|
—
|
—
|
—
|
(434,331
|
)
|
|||||||||
Net
Assets of Acquired Companies
|
$
|
3,000,000
|
$
|
2,966,861
|
$
|
2,349,000
|
$
|
13,311,000
|
$
|
21,626,861
|
||||||
Cash
and cash equivalents
|
$
|
166,962
|
$
|
297,626
|
$
|
16,489
|
$
|
—
|
$
|
481,077
|
||||||
Accounts
receivable, net
|
187,172
|
214,113
|
172,622
|
—
|
573,907
|
|||||||||||
Other
current assets
|
816,954
|
106,444
|
47,057
|
—
|
970,455
|
|||||||||||
Fixed
and other assets
|
13,730
|
482,552
|
106,790
|
—
|
603,072
|
|||||||||||
Goodwill
|
3,434,331
|
2,826,529
|
2,067,682
|
9,514,032
|
17,842,574
|
|||||||||||
Total
Assets
|
4,619,149
|
3,927,264
|
2,410,640
|
9,514,032
|
20,471,085
|
|||||||||||
Minority
Interest
|
—
|
—
|
—
|
(3,796,968
|
)
|
(3,796,968
|
)
|
|||||||||
Accounts
payable and accrued expenses
|
1,549,784
|
83,995
|
61,640
|
—
|
1,695,419
|
|||||||||||
Deferred
revenue
|
69,365
|
876,408
|
—
|
—
|
945,773
|
|||||||||||
Total
Liabilities
|
1,619,149
|
960,403
|
61,640
|
—
|
2,641,192
|
|||||||||||
Net
Assets Acquired
|
$
|
3,000,000
|
$
|
2,966,861
|
$
|
2,349,000
|
$
|
13,311,000
|
$
|
21,626,860
|
||||||
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
238,852,745
Shares of Common Stock
MOBILEPRO
CORP.
August
__ , 2006
|
|
|
|
|
|
|
|
Securities
and Exchange Commission Registration Fee
|
$
|
4,000
|
||
Printing
and Engraving Expenses
|
5,000
|
|||
Accounting
Fees and Expenses
|
2,500
|
|||
Legal
Fees and Expenses
|
30,000
|
|||
Miscellaneous
|
5,000
|
|||
TOTAL
|
$
|
46,500
|
(a) |
The
following exhibits are filed as part of this registration
statement:
|
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 between Crescent
Communications, Inc. and DFW Internet Services, Inc.
|
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on June 22, 2004
|
|
2.7
|
Agreement
and Plan of Merger, dated July 6, 2004, by and among the Company,
DFW
Internet Services, Inc., DFWC Acquisition Corp., Clover Computer
Corp. and
Paul Sadler
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on July 8, 2004
|
|
2.8
|
Agreement
and Plan of Merger, dated July 14, 2004, by and among DFW Internet
Services, Inc., DFWT Acquisition Corp., Ticon.net, Inc. and the
stockholders identified therein
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on July 15, 2004
|
2.9
|
Agreement
and Plan of Merger, dated July 30, 2004, by and among the Company,
Affinity Acquisition Corp., C.L.Y.K., Inc. and the stockholders identified
therein
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on August 20, 2004
|
2.10
|
Amendment
No. 1 to Agreement and Plan of Merger, dated December 28, 2004, by
and
among the Company, Affinity Acquisition Corp., C.L.Y.K., Inc. and
the
stockholders identified therein
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on January 21, 2005
|
|
2.11
|
Asset
Purchase Agreement, dated as of August 13, 2004, by and among Web
One,
Inc., DFW Internet Services, Inc. and Jeff McMurphy
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on August 19, 2004
|
|
2.12
|
Agreement
and Plan of Merger, dated August 31, 2004, by and among the Company,
MVCC
Acquisition Corp. and CloseCall America, Inc.
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on October 19, 2004
|
2.13
|
Amendment
No. 1 to Agreement and Plan of Merger, dated September 30, 2004,
by and
among the Company, MVCC Acquisition Corp. and CloseCall America,
Inc.
|
|
Incorporated
by reference to Exhibit 2.2 to the Registrant’s Current Report on Form 8-K
filed on October 19, 2004
|
|
2.14
|
Loan
Purchase Agreement and Transfer and Assignment of Shares, dated September
3, 2004, by and among the Company, Davel Acquisition Corp., Davel
Communications, Inc. and certain stockholders identified
therein
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on September 9, 2004
|
|
2.15
|
Agreement
and Plan of Merger, dated September 15, 2004, by and among the Company,
DFWW Acquisition Corp., World Trade Network, Inc. and Jack
Jui
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on September 15, 2004
|
|
2.16
|
Agreement
and Plan of Merger, dated September 16, 2004, by and among the Company,
DFW Internet Services, Inc., DFWR Acquisition Corp., The River Internet
Access Co. and the stockholders identified therein
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on September 17, 2004
|
|
2.17
|
Agreement
and Plan of Merger by and among Registrant, NeoReach, Inc., Transcordia
Acquisition Corp., Transcordia, LLC and its Unit Holders, dated April
2005
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Form 10-QSB filed August
15, 2005
|
|
2.18
|
Agreement
and Plan of Merger by and among Registrant, NeoReach, Inc., NeoReach
Wireless, Inc., Evergreen Open Broadband Corporation, and Certain
Shareholders
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Form 10-QSB filed August
15, 2005
|
|
2.19
|
Agreement
and Plan of Merger, dated June 30, 2005, by and among the Company,
AFN
Acquisition Corp., American Fiber Network, Inc. and the individuals
and
entities identified therein
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on July 6, 2005
|
2.20
|
Agreement
and Plan of Merger, dated October 31, 2005, by and among the Company,
InReach Internet, Inc., InReach Internet, LLC, and Balco Holdings,
Inc.
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed on November 7, 2005
|
|
2.21
|
Form
of Assignment of Limited Liability Company Interest/Release, dated
January
31, 2006
|
Incorporated
by reference to Exhibit 2.21 to the Registrant’s Quarterly Report on Form
10-Q filed on August 9, 2006
|
||
2.22
|
Agreement
and Plan of Merger, dated January 31, 2006, by and among Mobilepro
Corp.,
Kite Acquisition Corp. and Kite Networks, Inc.
|
Incorporated
by reference to Exhibit 2.22 to the Registrant’s Quarterly Report on Form
10-Q filed on August 9, 2006
|
||
3.1
|
Certificate
of Incorporation, dated April 20, 2001, of Registrant
|
|
Incorporated
by reference to Exhibit 3.1 to the Registrant’s Registration Statement on
Form S-8 filed on May 11, 2001
|
|
3.2
|
Certificate
of Amendment of Certificate of Incorporation of Mobilepro Corp dated
November 16, 2001.
|
|
Incorporated
by reference to Exhibit 3.1 to the Registrant’s Registration Statement on
Form S-8 filed on December 4, 2001
|
|
3.3
|
Certificate
of Amendment to Certificate of Incorporation of Mobilepro Corp. dated
March 11, 2003
|
|
Incorporated
by reference to Exhibit 3.11 to the Registrant’s Registration Statement on
Form SB-2 filed on May 6, 2003
|
|
3.4
|
By-Laws
of Registrant
|
|
Incorporated
by reference to Exhibit 3.2 to the Registrant’s Registration Statement on
Form S-8 filed on May 11, 2001
|
|
4.1
|
2001
Equity Performance Plan
|
|
Incorporated
by reference to Exhibit 4.1 to the Registrant’s Registration Statement on
Form S-8 filed on December 4, 2001
|
|
4.2
|
Amended
and Restated 2001 Equity Performance Plan
|
|
Incorporated
by reference to Exhibit 4.2 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2004
|
|
4.3
|
Registration
Rights Agreement, dated September 16, 2004, by and among the Company
and
the persons and entities identified therein
|
|
Incorporated
by reference to Exhibit 4.3 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
4.4
|
Registration
Rights Agreement, dated November 15, 2004, by and among the Company
and
the persons and entities identified therein
|
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Current Report on Form
8-K filed on November 17, 2004
|
|
4.5
|
Form
of Warrant issued on November 15, 2004
|
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Current Report on Form
8-K filed on November 17, 2004
|
4.6
|
Registration
Rights Agreement, dated June 30, 2005, by and among the Company and
the
persons and entities identified therein
|
|
Incorporated
by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K
filed on July 6, 2005
|
|
4.7
|
Registration
Rights Agreement, dated November 1, 2005, by and among the Company
and the
persons and entities identified therein
|
|
Incorporated
by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K
filed on November 7, 2005
|
|
5.1
|
Opinion
on legality
|
Provided
herewith
|
||
10.1
|
Memorandum
of Understanding between NeoReach, Inc., and RF Microelectronics
Laboratory of Information and Communications University, South Korea
dated
July 31, 2002 for opportunities to cooperate in research, particularly
in
RF-CMOS ASICs development for RF transceiver of third generation
W-CDMA
standard
|
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s amended Quarterly Report
on Form 10-QSB/A filed on October 4, 2002
|
|
10.2
|
Termination
Agreement dated November 26, 2003, between Arne Dunhem and Mobilepro
Corp.
|
|
Incorporated
by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form
10-Q filed on February 13, 2004
|
|
10.3
|
Amendment
No. 1 to Termination Agreement, dated December 30, 2003, between
Arne
Dunhem and Mobilepro Corp.
|
|
Incorporated
by reference to Exhibit 10.17 to the Post-Effective Amendment to
Registrant’s Registration Statement on Form SB-2 filed on May 13,
2004.
|
|
10.4
|
Amendment
No. 2 to Termination Agreement, dated April 8, 2004, between Arne
Dunhem
and Mobilepro Corp.
|
|
Incorporated
by reference to Exhibit 10.18 to the Post-Effective Amendment to
Registrant’s Registration Statement on Form SB-2 filed on May 13,
2004
|
|
10.5
|
Amendment
No. 3 to Termination Agreement, dated May 2, 2004, between Arne Dunhem
and
Mobilepro Corp.
|
|
Incorporated
by reference to Exhibit 10.19 to the Post-Effective Amendment to
Registrant’s Registration Statement on Form SB-2 filed on May 13,
2004
|
|
10.6
|
Executive
Employment Agreement, dated December 15, 2003, between Jay O. Wright
and
the Company
|
|
Incorporated
by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form
10-QSB filed on February 13, 2004
|
|
10.7
|
Executive
Employment Agreement, dated April 15, 2004 between Jay O. Wright
and the
Company
|
|
Incorporated
by reference to Exhibit 10.15 to the Amendment to Registrant’s
Registration Statement on Form SB-2 filed on May 14, 2004
|
|
10.8
|
Amended
and Restated Executive Employment Agreement, dated June 9, 2004 between
Jay O. Wright and the Company
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on June 15, 2004
|
|
10.9
|
Executive
Employment Agreement, dated February 20, 2004 between Kurt Gordon
and the
Company
|
|
Incorporated
by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2004
|
10.10
|
Standby
Equity Distribution Agreement, dated May 13, 2004 between the Company
and
Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.20 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004
|
|
10.11
|
Registration
Rights Agreement, dated May 13, 2004 between the Company and Cornell
Capital
|
|
Incorporated
by reference to Exhibit 10.21 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004
|
|
10.12
|
Placement
Agent Agreement, dated May 13, 2004 between the Company and Newbridge
Securities Corporation
|
|
Incorporated
by reference to Exhibit 10.22 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004
|
|
10.13
|
Escrow
Agreement, dated May 13, 2004 between the Company and Cornell
Capital
|
|
Incorporated
by reference to Exhibit 10.23 to the Registrant’s Registration Statement
on Form SB-2 filed on May 14, 2004
|
|
10.14
|
Consulting
Agreement by and among Mobilepro Corp., DFW Internet Services, Inc.,
Beech
Holdings, Inc., and Jack W. Beech, Jr.
|
|
Incorporated
by reference to Exhibit 99.1 to the Registrant’s Current Report on Form
8-K filed on February 4, 2004
|
|
10.15
|
Executive
Employment Agreement dated June 10, 2004 between Kevin Kuykendall
and
Mobilepro Corp.
|
|
Incorporated
by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2004
|
10.16
|
Amended
and Restated Executive Employment Agreement dated October 14, 2004,
between Kevin Kuykendall and the Company
|
|
Incorporated
by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.17
|
Development
Agreement by and among the Company, NeoReach, Inc. and Information
and
Communications University*
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.18
|
Promissory
Note issued by the Company to Cornell Capital on August 23,
2004
|
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.19
|
Security
Agreement between the Company and Cornell Capital dated August 23,
2004
|
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.20
|
Promissory
Note issued by the Company to Cornell Capital on August 25,
2004
|
|
Incorporated
by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.21
|
Security
Agreement between the Company and Cornell Capital dated August 25,
2004
|
|
Incorporated
by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
10.22
|
Letter
Agreement between the Company and Cornell Capital dated August 27,
2004
|
|
Incorporated
by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.23
|
Promissory
Note issued by the Company to Cornell Capital on August 27,
2004
|
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Current Report on Form
8-K filed on October 19, 2004
|
|
|
10.24
|
Security
Agreement between the Company and Cornell Capital dated August 27,
2004
|
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Current Report on Form
8-K filed on October 19, 2004
|
|
|
10.25
|
Promissory
Note issued by the Company to Cornell Capital on September 22,
2004
|
|
Incorporated
by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.26
|
Security
Agreement between the Company and Cornell Capital dated September
22,
2004
|
|
Incorporated
by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form
10-QSB filed on November 15, 2004
|
|
|
10.27
|
Executive
Employment Agreement by and among the Company, CloseCall America,
Inc. and
Tom Mazerski
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on October 19, 2004
|
|
|
10.28
|
Executive
Employment Agreement dated November 2, 2004, between Geoffrey Amend
and
the Company
|
|
Incorporated
by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form
10-QSB filed on February 14, 2005
|
|
|
10.29
|
Executive
Employment Agreement dated December 1, 2004, between Bruce Sanguinetti
and
the Company
|
|
Incorporated
by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form
10-QSB filed on February 14, 2005
|
|
|
10.30
|
Credit
Agreement, dated November 15, 2004, by and among the Company, Davel
Acquisition Corp. and Airlie Opportunity Master Fund, Ltd.
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on November 17, 2004
|
|
|
10.31
|
Executive
Employment Agreement dated December 15, 2004, between John Dumbleton
and
the Company
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on December 17, 2004
|
|
|
10.32
|
Employment
Agreement dated February 28, 2005 between Davel Communications, Inc.
and
Tammy L. Martin
|
|
Incorporated
by reference to Exhibit 10.28 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.33
|
Amendment
No. 1 to Employment Agreement between Davel Communications, Inc.
and Tammy
L. Martin, dated April 20, 2005
|
|
Incorporated
by reference to Exhibit 10.29 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.34
|
Amendment
No. 2 to Employment Agreement between Davel Communications, Inc.
and Tammy
L. Martin, dated May 26, 2005
|
|
Incorporated
by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
10.35
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
between
Jay O. Wright and the Company
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on June 20, 2005
|
|
|
10.36
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
between
Kurt Gordon and the Company
|
|
Incorporated
by reference to Exhibit 10.32 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.37
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005
by and
among the Company, CloseCall America, Inc. and Tom Mazerski
|
|
Incorporated
by reference to Exhibit 10.33 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.38
|
Amended
and Restated Executive Employment Agreement, dated June 16, 2005,
between
Geoffrey Amend and the Company
|
|
Incorporated
by reference to Exhibit 10.34 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.39
|
Securities
Purchase Agreement, dated as of May 13, 2005, by and between the
Company
and Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.35 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.40
|
Secured
Convertible Debenture, issued on May 13, 2005 by the Company to Cornell
Capital
|
|
Incorporated
by reference to Exhibit 10.36 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.41
|
Amended
and Restated Collateral Assignment of Intellectual Property Rights,
made
as of May 13, 2005, by and among the Company, the Company subsidiaries
identified therein and Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.37 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.42
|
Amended
and Restated Security Agreement, dated May 13, 2005, by and among
the
Company, the subsidiaries identified therein and Cornell
Capital
|
|
Incorporated
by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.43
|
Investor
Registration Rights Agreement, dated as of May 13, 2005 by and between
the
Company and Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.39 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.44
|
Amended
and Restated Guaranty Agreement, dated as of May 13, 2005, made by
each of
the direct and indirect subsidiaries of the Company in favor of Cornell
Capital
|
|
Incorporated
by reference to Exhibit 10.40 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.45
|
Warrant
issued by the Company to Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form
10-KSB filed on June 28, 2005
|
|
|
10.46
|
Executive
Employment Agreement dated September 1, 2005, between James L. Magruder,
Jr. and the Company
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed September 9, 2005
|
|
10.47
|
Master
Agreement for Services between Sprint Communications Company L.P.
and Kite
Broadband, LLC, dated May 20, 2005*
|
|
Incorporated
by reference to Exhibit 2.1 to the Registrant’s Form 10-QSB filed November
14, 2005
|
|
|
10.48
|
Agreement
between the City of Tempe and NeoReach, Inc. for the Use of City
Property
in Connection with the Operation of a WiFi Network, dated August
17,
2005
|
|
Incorporated
by reference to Exhibit 10.48 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2006
|
|
|
10.49
|
Executive
Employment Agreement dated February 1, 2006, between Jerry M.
Sullivan, Jr. and the Company
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed February 13, 2005
|
|
|
10.50
|
Secured
Convertible Debenture, issued on June 30, 2006 by the Company to
Cornell
Capital
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed July 7, 2006
|
||
10.51
|
Warrant
issued by the Company to Cornell Capital
|
Incorporated
by reference to Exhibit 10.40 to the Registrant’s Quarterly Report on Form
10-Q filed on August 9, 2006
|
|||
10.52
|
Master
Lease Agreement dated June 28, 2006 between JTA Leasing Co., LLC,
Mobilepro Corp., and NeoReach, Inc.
|
Incorporated
by reference to Exhibit 10.41 to the Registrant’s Quarterly Report on Form
10-Q filed on August 9, 2006
|
|||
10.53
|
Letter
Agreement between American Fiber Network, Inc. and FSH Communications
LLC,
dated June 30, 2006*
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K, dated July 11, 2006
|
|||
21.1
|
Subsidiaries
of Registrant
|
|
Incorporated
by reference to Exhibit 21.1 to the Registrant’s Annual Report on Form
10-KSB filed on June 29, 2006
|
|
|
23.1
|
Consent
of Bagell, Josephs, Levine & Company, L.L.C.
|
|
Provided
herewith
|
|
|
23.2
|
Consent
of Seyfarth Shaw LLP
|
|
Provided
herewith (see Exhibit 5.1)
|
99.1
|
Press
Release dated December 28, 2005 regarding corporate
restructuring
|
|
Incorporated
by reference to Exhibit 99.1 to the Registrant's Current Report on
Form
8-K filed January 1, 2006.
|
|
MOBILEPRO CORP. | |||
By: | /s/ Jay O. Wright | Date: August 14, 2006 | |
Name:
Jay O. Wright
Title: Chief
Executive Officer
|
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
/s/
Jay O. Wright
|
|
Chief
Executive Officer,
|
|
August
14, 2006
|
|
Jay
O. Wright
|
|
Principal
Executive Officer and Director
|
|
|
|
|
|
|
|
|
|
/s/ Richard
H. Deily
|
|
Senior
Vice President, Chief Accounting Officer, Principal
|
|
August
14, 2006
|
|
Richard
H. Deily
|
|
Financial
Officer and Accounting Officer
|
|
|
|
|
|
|
|
|
|
/s/
Jack W. Beech
|
Director
|
August
14, 2006
|
|||
Jack
W. Beech
|
|||||
/s/
Chris W. MacFarland
|
|
Director
|
|
August
14, 2006
|
|
Chris
W. MacFarland
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Michael G. O’Neil
|
|
Director
|
|
August
14, 2006
|
|
Michael
G. O’Neil
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Don H. Sledge
|
|
Director
|
|
August
14, 2006
|
|
Don
H. Sledge
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Jerry M. Sullivan, Jr.
|
|
President,
Chief Operating Officer, and Director
|
|
August
14, 2006
|
|
Jerry
M. Sullivan, Jr.
|
|
|
|
|
|