DELAWARE
|
|
87-0419571
|
(State
or other jurisdiction of incorporation or organization)
|
|
(I.R.S.
Employer Identification No.)
|
6701
Democracy Boulevard, Suite 202, Bethesda, MD
|
|
20817
|
(Address
of principal executive offices)
|
|
(Zip
code)
|
Large
Accelerated Filer o
|
Accelerated
Filer x
|
|
Non-Accelerated
Filer o
|
ITEM
NUMBER AND CAPTION
|
PAGE
|
PART
I
|
|
||
|
|||
ITEM
1.
|
FINANCIAL
STATEMENTS
|
3
|
|
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
8
|
||
ITEM
2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
|
24
|
|
ITEM
3.
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
54
|
|
ITEM
4
|
CONTROLS
AND PROCEDURES
|
54
|
|
|
|||
PART
II
|
|
||
|
|||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
55
|
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
56
|
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
57
|
|
ITEM
4.
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
|
57
|
|
ITEM
5.
|
OTHER
INFORMATION
|
57
|
|
ITEM
6.
|
EXHIBITS
|
57
|
September
30,
|
March
31,
|
||||||
|
2006
|
2006
|
|||||
(unaudited)
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
3,283,118
|
$
|
5,397,881
|
|||
Restricted
cash
|
1,110,235
|
352,200
|
|||||
Accounts
receivable, net
|
9,091,203
|
10,481,632
|
|||||
Prepaid
expenses and other current assets
|
3,337,363
|
3,399,864
|
|||||
Total
Current Assets
|
16,821,919
|
19,631,577
|
|||||
FIXED
ASSETS, NET OF ACCUMULATED DEPRECIATION
|
19,130,816
|
15,859,254
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill,
net of impairment
|
47,220,042
|
47,788,167
|
|||||
Customer
contracts and relationships, net of amortization
|
8,119,324
|
8,777,502
|
|||||
Deferred
financing fees, net of amortization
|
—
|
146,667
|
|||||
Other
assets
|
1,638,411
|
1,787,886
|
|||||
56,977,777
|
58,500,222
|
||||||
TOTAL
ASSETS
|
$
|
92,930,512
|
$
|
93,991,053
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
September
30,
|
March
31,
|
||||||
2006
|
2006
|
||||||
(unaudited)
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Current
portion of convertible debentures
|
$
|
13,712,421
|
$
|
4,500,000
|
|||
Current
portion of long-term debt and notes payable
|
649,253
|
4,269,519
|
|||||
Accounts
payable and accrued expenses
|
16,560,135
|
17,402,911
|
|||||
Deferred
revenue
|
4,746,159
|
4,343,754
|
|||||
Total
Current Liabilities
|
35,667,968
|
30,516,184
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Convertible
debentures, net of unamortized debt discount and
|
|||||||
current
portion
|
3,243,011
|
9,995,243
|
|||||
Notes
payable and other long-term liabilities, net of current
maturities
|
1,699,482
|
650,419
|
|||||
Total
Long-Term Liabilities
|
4,942,493
|
10,645,662
|
|||||
TOTAL
LIABILITIES
|
40,610,461
|
41,161,846
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Preferred
stock, $.001 par value, 20,035,425 shares authorized,
|
|||||||
35,378
shares issued and outstanding at March 31, 2006 and September
30, 2006
|
35
|
35
|
|||||
Common
stock, $.001 par value, 1,500,000,000 shares authorized,
|
|||||||
560,666,950
and 589,189,570 shares issued and outstanding
|
|||||||
at
March 31, 2006 and September 30, 2006
|
589,259
|
560,667
|
|||||
Additional
paid-in capital
|
91,952,135
|
83,641,462
|
|||||
Accumulated
deficit
|
(40,221,378
|
)
|
(31,372,957
|
)
|
|||
Total
Stockholders' Equity
|
52,320,051
|
52,829,207
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
92,930,512
|
$
|
93,991,053
|
For
the Three Months Ended
|
For
the Six Months Ended
|
||||||||||||
September
30,
|
September
30,
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
REVENUES
|
$
|
23,410,650
|
$
|
26,546,650
|
$
|
46,753,436
|
$
|
49,052,495
|
|||||
OPERATING
COSTS AND EXPENSES
|
|||||||||||||
Cost
of services (exclusive of depreciation and amortization)
|
13,137,246
|
11,654,395
|
25,899,204
|
22,676,257
|
|||||||||
Payroll,
professional fees and related expenses (exclusive of stock
compensation)
|
5,304,277
|
5,536,347
|
11,209,730
|
9,229,905
|
|||||||||
Advertising
and marketing expenses
|
590,207
|
799,193
|
1,291,958
|
1,317,857
|
|||||||||
Office
rent and expenses
|
748,548
|
933,737
|
1,581,209
|
1,714,852
|
|||||||||
Other
general and administrative expenses
|
4,783,994
|
5,210,715
|
9,390,997
|
9,527,617
|
|||||||||
Depreciation
and amortization
|
1,448,892
|
1,047,319
|
2,779,803
|
1,869,696
|
|||||||||
Stock
compensation
|
471,556
|
—
|
956,647
|
—
|
|||||||||
Goodwill
impairment charges
|
529,736
|
—
|
877,854
|
—
|
|||||||||
Restructuring
charges
|
(19,832
|
)
|
—
|
283,839
|
—
|
||||||||
Total
Operating Costs and Expenses
|
26,994,624
|
25,181,706
|
54,271,241
|
46,336,184
|
|||||||||
OPERATING
INCOME/(LOSS)
|
(3,583,974
|
)
|
1,364,944
|
(7,517,805
|
)
|
2,716,311
|
|||||||
INTEREST
EXPENSE, NET
|
(526,940
|
)
|
(698,335
|
)
|
(921,015
|
)
|
(1,630,510
|
||||||
MINORITY
INTERESTS IN NET (INCOME)/LOSS OF
|
|||||||||||||
CONSOLIDATED
SUBSIDIARIES
|
—
|
(142,709
|
)
|
—
|
(142,709
|
||||||||
LOSS
ON EXTINGUISHMENT OF DEBT
|
—
|
—
|
(409,601
|
)
|
—
|
||||||||
NET
INCOME/(LOSS) BEFORE PROVISION FOR INCOME TAXES
|
(4,110,914
|
)
|
523,900
|
(8,848,421
|
)
|
943,092
|
|||||||
Provision
for Income Taxes
|
—
|
—
|
—
|
—
|
|||||||||
NET
INCOME/(LOSS) APPLICABLE TO COMMON SHARES
|
$
|
(4,110,914
|
)
|
$
|
523,900
|
$
|
(8,848,421
|
)
|
$
|
943,092
|
|||
NET
INCOME/(LOSS) PER SHARE
|
|||||||||||||
Basic
|
$
|
(0.0070
|
)
|
$
|
0.0014
|
$
|
(0.0151
|
)
|
$
|
0.0025
|
|||
Diluted
|
$
|
(0.0070
|
)
|
$
|
0.0012
|
$
|
(0.0151
|
)
|
$
|
0.0023
|
|||
WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING |
589,065,246
|
388,001,055
|
584,586,874
|
374,464,022
|
For
the Six Months Ended
|
|||||||
September
30,
|
|||||||
2006
|
2005
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
income/(loss)
|
$
|
(8,848,421
|
)
|
$
|
943,092
|
||
Items
that reconcile net income/(loss) to net cash
|
|||||||
(used
in) operating activities:
|
|||||||
Depreciation
and amortization
|
2,779,803
|
1,869,686
|
|||||
Noncash
interest expense and loss on debt extinguishment
|
882,649
|
352,597
|
|||||
Goodwill
impairment charges
|
877,854
|
—
|
|||||
Restructuring
charges
|
283,839
|
—
|
|||||
Minority
interests
|
—
|
142,709
|
|||||
Common
stock issued for services
|
992,647
|
—
|
|||||
Changes
in assets and liabilities
|
|||||||
(Increase)
decrease in accounts receivable
|
1,390,429
|
(639,113
|
)
|
||||
Decrease
in other current assets
|
562,045
|
435,625
|
|||||
(Increase)
in other assets
|
(199,334
|
)
|
(649,960
|
)
|
|||
(Decrease)
in accounts payable and
|
|||||||
and
accrued expenses
|
(2,766,062
|
)
|
(2,230,804
|
)
|
|||
Increase
in deferred revenue
|
168,182
|
439,486
|
|||||
4,972,052
|
(279,774
|
)
|
|||||
Net
cash provided by (used in) operating
activities
|
(3,876,369
|
)
|
663,318
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|||||||
Proceeds
from the sale/leaseback of wireless network equipment
|
2,000,000
|
—
|
|||||
Purchase
of certificates of deposit
|
(758,035
|
)
|
—
|
||||
Capital
expenditures, net
|
(4,543,094
|
)
|
(1,641,539
|
)
|
|||
Acquisition
of intangible assets
|
(37,167
|
)
|
(6,778,129
|
)
|
|||
Cash
paid for acquisitions
|
—
|
(2,024,646
|
)
|
||||
Net
cash (used in) investing activities
|
(3,338,296
|
)
|
(10,444,314
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
Net
proceeds from common stock issuances
|
6,660,652
|
12,374,500
|
|||||
Borrowings/(payments)
under other notes payable, net
|
(3,823,250
|
)
|
(4,282,763
|
)
|
|||
Proceeds
from the issuance of convertible debentures
|
2,438,500
|
15,500,000
|
|||||
Retirement
of acquisition bridge loan
|
—
|
(13,000,000
|
)
|
||||
Investment
by minority interests
|
—
|
3,675,000
|
|||||
Financing
fees
|
(176,000
|
)
|
(1,295,000
|
)
|
|||
Net
cash provided by financing activities
|
5,099,902
|
12,971,737
|
For
the Six Months Ended
|
|||||||
September
30,
|
|||||||
2006
|
2005
|
||||||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
$ |
(2,114,763
|
)
|
$
|
3,190,741
|
||
CASH
AND CASH EQUIVALENTS - BEGINNING OF PERIOD
|
5,397,881
|
4,669,787
|
|||||
CASH
AND CASH EQUIVALENTS - END OF PERIOD
|
$
|
3,283,118
|
$
|
7,860,528
|
|||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW
|
|||||||
INFORMATION:
|
|||||||
Cash
paid during the period for interest
|
$
|
1,070,210
|
$
|
1,034,928
|
|||
SUPPLEMENTAL
DISCLOSURE OF NONCASH
|
|||||||
ACTIVITIES:
|
|||||||
Issuance
of Amended Debenture to Cornell Capital
|
$
|
15,149,650
|
$
|
—
|
|||
Return
of Debenture by Cornell Capital
|
$
|
15,000,000
|
$
|
—
|
|||
Capital
lease
|
$
|
1,875,721
|
$
|
—
|
|||
Amortization
of SEDA deferred financing fees
|
$
|
147,000
|
$
|
440,000
|
|||
Goodwill
recorded in acquisitions
|
$
|
—
|
$
|
2,277,840
|
|||
Liability
for common stock to be issued
|
$
|
—
|
$
|
422,513
|
|||
Conversion
of liabilities to common stock
|
$
|
—
|
$
|
1,058,841
|
|||
Adjustment
to minority interest
|
$
|
—
|
$
|
150,000
|
|||
Issuance
of common stock for acquisitions
|
$
|
—
|
$
|
366,406
|
Estimated
|
|
|
|
|
|
|||||
|
|
Useful
|
|
September
30,
|
|
March
31,
|
|
|||
|
|
Lives
(in years)
|
|
2006
|
|
2006
|
||||
(unaudited)
|
||||||||||
Furniture
and fixtures
|
7
|
$
|
563,569
|
$
|
698,828
|
|||||
Machinery
and equipment
|
5
|
23,941,626
|
20,561,029
|
|||||||
Leasehold
improvements
|
7
|
518,560
|
788,610
|
|||||||
Vehicles
|
5
|
156,194
|
204,205
|
|||||||
Subtotals
|
25,179,949
|
22,252,672
|
||||||||
Less
accumulated depreciation
|
(6,049,133
|
)
|
(6,393,418
|
)
|
||||||
Fixed
assets, net
|
$
|
19,130,816
|
$
|
15,859,254
|
September
30,
|
March
31,
|
||||||
|
2006
|
2006
|
|||||
|
(unaudited)
|
||||||
Accounts
payable
|
$
|
10,147,772
|
$
|
10,229,960
|
|||
Accrued
location usage fees
|
2,049,541
|
2,271,060
|
|||||
Accrued
restructuring costs
|
481,213
|
486,311
|
|||||
Accrued
compensation
|
709,633
|
1,048,027
|
|||||
Accrued
interest expense
|
312,476
|
873,206
|
|||||
Other
accrued liabilities
|
2,859,500
|
2,494,347
|
|||||
Totals
|
$
|
16,560,135
|
$
|
17,402,911
|
Amended
Debenture
|
$
|
15,149,650
|
||
First
Tranche Debenture
|
2,300,000
|
|||
Capital
leases
|
2,083,997
|
|||
Other
notes payable and long-term obligations
|
403,237
|
|||
19,936,884
|
||||
Less:
Unamortized debt discounts
|
(632,717
|
)
|
||
Less:
Amounts due within one year
|
(14,361,674
|
)
|
||
Long-term
portion of debt
|
$
|
4,942,493
|
The
twelve months ending --
|
||||
September
30, 2008
|
$
|
4,743,909
|
||
September
30, 2009
|
605,222
|
|||
5,349,131
|
||||
Less
- Unamortized debt discount
|
(406,638
|
)
|
||
Long-term
portion of debt
|
$
|
4,942,493
|
|
|
Weighted-
|
|
||||
|
|
|
|
Average
|
|
||
|
|
Number
of
|
|
Exercise
|
|
||
Stock
Options --
|
|
Options
|
|
Price
|
|||
Outstanding
- March 31, 2006
|
11,076,000
|
$
|
0.2260
|
||||
Granted
|
—
|
$
|
—
|
||||
Exercised
|
—
|
$
|
—
|
||||
Cancelled
|
—
|
$
|
—
|
||||
Outstanding
- June 30, 2006
|
11,076,000
|
$
|
0.2260
|
||||
Granted
|
—
|
$
|
—
|
||||
Exercised
|
(300,996
|
)
|
$
|
0.0528
|
|||
Cancelled
|
(574,004
|
)
|
$
|
0.2232
|
|||
Outstanding
- September 30, 2006
|
10,201,000
|
$
|
0.2312
|
||||
Exercisable
- September 30, 2006
|
4,127,676
|
$
|
0.2443
|
Weighted-
|
|||||||
Average
|
|||||||
Number
of
|
Exercise
|
||||||
Stock
Warrants --
|
Warrants
|
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
|
||||
Granted
|
34,083,334
|
$
|
0.1936
|
||||
Exercised
|
—
|
$
|
—
|
||||
Cancelled
|
(16,000,000
|
)
|
$
|
0.3594
|
|||
Outstanding
- September 30, 2006
|
116,765,834
|
$
|
0.1659
|
||||
Exercisable
- September 30, 2006
|
101,168,547
|
$
|
0.1614
|
Six
Months
|
||||
Ended
|
||||
September
30,
|
||||
2005
|
||||
Net
income, as reported
|
$
|
943,092
|
||
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
|
(1,900,247
|
)
|
||
Pro
forma net loss
|
$
|
(957,155
|
)
|
|
Net
income (loss) per share:
|
||||
Diluted,
as reported
|
$
|
0.0023
|
||
Diluted,
pro forma
|
$
|
(0.0026
|
)
|
2006
|
|
2005
|
|||||
Dividend
yield
|
—
|
%
|
-
|
%
|
|||
Expected
volatility
|
60
|
%
|
60
|
%
|
|||
Risk-free
interest rate
|
4.00
|
%
|
3.00
|
%
|
|||
Expected
term (in years)
|
10.00
|
10.00
|
Three
Months Ended September 30, 2005
|
Six
Months Ended September 30, 2005
|
||||||
Net
income
|
$
|
523,900
|
$
|
943,092
|
|||
Weighted
average number of shares outstanding during the period
|
388,001,055
|
374,464,022
|
|||||
Add:
the treasury stock effect of stock options and warrants
|
41,914,293
|
40,930,727
|
|||||
Add
the effect of assumed SEDA draws
|
8,216,171
|
—
|
|||||
|
|
||||||
Diluted
number of shares outstanding
|
438,131,519
|
415,394,749
|
|||||
Net
income per share:
|
|
||||||
Basic
|
$
|
0.0014
|
$
|
0.0025
|
|||
Diluted
|
$
|
0.0012
|
$
|
0.0023
|
|
|
|
Voice
|
|
|
Internet
|
|
|
Wireless
|
|
|
|
|
|
|
|
2006
|
|
|
Services
|
|
|
Services
|
|
|
Networks
|
|
|
Corporate
|
|
|
Total
|
|
Revenues
|
$
|
16,624,821
|
$
|
3,820,520
|
$
|
2,965,309
|
$
|
—
|
$
|
23,410,650
|
||||||
Cost
of revenues (excludes depreciation and amortization)
|
9,240,304
|
2,107,766
|
1,789,176
|
—
|
13,137,246
|
|||||||||||
Other
operating expenses
|
6,719,130
|
1,881,264
|
2,097,135
|
1,201,053
|
11,898,582
|
|||||||||||
Depreciation
and amortization
|
857,746
|
114,188
|
476,958
|
—
|
1,448,892
|
|||||||||||
Goodwill
impairment charges
|
—
|
529,736
|
—
|
—
|
529,736
|
|||||||||||
Restructuring
charges
|
—
|
75,835
|
—
|
(95,667
|
)
|
(19,832
|
)
|
|||||||||
Interest
expense, net
|
(54,685
|
)
|
400
|
28,755
|
552,470
|
526,940
|
||||||||||
Net
income (loss)
|
$
|
(137,674
|
)
|
$
|
(888,669
|
)
|
$
|
(1,426,715
|
)
|
$
|
(1,657,856
|
)
|
$
|
(4,110,914
|
)
|
|
Segment
assets
|
$
|
25,564,721
|
$
|
37,700,937
|
$
|
27,842,776
|
$
|
1,931,656
|
$
|
92,930,512
|
||||||
Fixed
assets, net of accumulated depreciation
|
$
|
10,602,126
|
$
|
1,329,220
|
$
|
7,084,470
|
$
|
115,000
|
$
|
19,130,816
|
||||||
Goodwill,
net of impairment
|
$
|
20,531,278
|
$
|
14,612,831
|
$
|
12,075,933
|
$
|
—
|
$
|
47,220,042
|
|
|
Voice
|
|
Internet
|
|
Wireless
|
|
|
|
|
|
|||||
2005
|
|
Services
|
|
Services
|
|
Networks
|
|
Corporate
|
|
Total
|
||||||
Revenues
|
$
|
19,333,581
|
$
|
3,823,619
|
$
|
3,389,450
|
$
|
—
|
$
|
26,546,650
|
||||||
Cost
of revenues (excludes depreciation and amortization)
|
8,197,761
|
1,782,707
|
1,673,927
|
—
|
11,654,395
|
|||||||||||
Other
operating expenses
|
8,290,359
|
1,683,449
|
1,926,127
|
580,057
|
12,479,992
|
|||||||||||
Depreciation
and amortization
|
775,316
|
85,129
|
183,228
|
3,646
|
1,047,319
|
|||||||||||
Interest
expense, net
|
7,491
|
(4,849
|
)
|
(
9,128
|
)
|
704,821
|
698,335
|
|||||||||
Minority
interests
|
(35,645
|
)
|
—
|
178,354
|
—
|
142,709
|
||||||||||
Net
income (loss)
|
$
|
2,098,299
|
$
|
277,183
|
$
|
(563,058
|
)
|
$
|
(1,288,524
|
)
|
$
|
523,900
|
||||
|
||||||||||||||||
Segment
assets
|
$
|
55,190,207
|
$
|
17,897,818
|
$
|
10,712,861
|
$
|
3,359,932
|
$
|
87,160,818
|
||||||
|
||||||||||||||||
Fixed
assets, net of accumulated depreciation
|
$
|
11,740,439
|
$
|
1,277,848
|
$
|
668,216
|
$
|
3,675
|
$
|
13,690,178
|
||||||
|
||||||||||||||||
Goodwill,
net of impairment
|
$
|
21,925,741
|
$
|
15,072,519
|
$
|
494,219
|
$
|
—
|
$
|
37,492,479
|
|
Voice
|
Internet
|
Wireless
|
|
|
|||||||||||
2006
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
Revenues
|
$
|
32,708,862
|
$
|
8,040,953
|
$
|
6,003,621
|
$
|
—
|
$
|
46,753,436
|
||||||
Cost
of revenues (excludes depreciation and
amortization)
|
18,218,877
|
4,088,228
|
3,592,099
|
—
|
25,899,204
|
|||||||||||
Other
operating expenses
|
13,702,829
|
4,071,954
|
4,127,422
|
2,937,937
|
24,840,142
|
|||||||||||
Depreciation
and amortization
|
1,681,436
|
225,985
|
872,382
|
—
|
2,779,803
|
|||||||||||
Goodwill
impairment charges
|
—
|
877,854
|
—
|
—
|
877,854
|
|||||||||||
Restructuring
charges
|
—
|
97,871
|
—
|
185,968
|
283,839
|
|||||||||||
Interest
expense, net
|
(188,073
|
)
|
982
|
14,996
|
1,093,110
|
921,015
|
||||||||||
Net
income (loss)
|
$
|
(706,207
|
)
|
$
|
(1,321,921
|
)
|
$
|
(2,603,278
|
)
|
$
|
(4,217,015
|
)
|
$
|
(8,848,421
|
)
|
|
Voice
|
Internet
|
Wireless
|
|
|
|||||||||||
2005
|
Services
|
Services
|
Networks
|
Corporate
|
Total
|
|||||||||||
|
|
|
|
|
|
|||||||||||
Revenues
|
$
|
37,796,032
|
$
|
7,861,019
|
$
|
3,395,444
|
$
|
—
|
$
|
49,052,495
|
||||||
Cost
of revenues (excludes depreciation and
amortization)
|
17,251,793
|
3,738,731
|
1,685,733
|
—
|
22,676,257
|
|||||||||||
Other
operating expenses
|
15,231,270
|
3,436,254
|
2,154,076
|
968,631
|
21,790,231
|
|||||||||||
Depreciation
and amortization
|
1,511,859
|
166,928
|
183,616
|
7,293
|
1,869,696
|
|||||||||||
Interest
expense, net
|
8,040
|
13,616
|
(9,202
|
)
|
1,618,056
|
1,630,510
|
||||||||||
Minority
interests
|
(35,645
|
)
|
—
|
178,354
|
—
|
142,709
|
||||||||||
Net
income (loss)
|
$
|
3,828,715
|
$
|
505,490
|
$
|
(797,133
|
)
|
$
|
(2,593,980
|
)
|
$
|
943,092
|
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
|
$
|
16,624,821
|
$
|
19,333,581
|
|||
Internet
Services
|
3,820,520
|
3,823,619
|
|||||
Wireless
Networks
|
2,965,309
|
3,389,450
|
|||||
Corporate
|
—
|
—
|
|||||
Total
Revenues
|
$
|
23,410,650
|
$
|
26,546,650
|
Business
Segment
|
2006
|
2005
|
|||||
Voice
Services
|
$
|
32,708,862
|
$
|
37,796,032
|
|||
Internet
Services
|
8,040,953
|
7,861,019
|
|||||
Wireless
Networks
|
6,003,621
|
3,395,444
|
|||||
Corporate
|
—
|
—
|
|||||
Total
Revenues
|
$
|
46,753,436
|
$
|
49,052,495
|
Business
Segment
|
|
2006
|
|
2005
|
|||
Voice
Services
|
71.0
|
%
|
72.8
|
%
|
|||
Internet
Services
|
16.3
|
14.4
|
|||||
Wireless
Networks
|
12.7
|
12.8
|
|||||
Corporate
|
—
|
—
|
|||||
Total
Revenues
|
100.0
|
%
|
100.0
|
%
|
Business
Segment
|
|
2006
|
|
2005
|
|||
Voice
Services
|
70.0
|
%
|
77.1
|
%
|
|||
Internet
Services
|
17.2
|
16.0
|
|||||
Wireless
Networks
|
12.8
|
6.9
|
|||||
Corporate
|
—
|
—
|
|||||
Total
Revenues
|
100.0
|
%
|
100.0
|
%
|
Company
|
2006
|
2005
|
Change
|
|||||||
Davel
|
$
|
8,564,757
|
$
|
11,023,391
|
$
|
(2,458,634
|
)
|
|||
CloseCall
(includes Affinity)
|
5,923,077
|
6,677,701
|
(754,624
|
)
|
||||||
Kite
Broadband
|
2,893,582
|
3,385,314
|
(491,732
|
)
|
||||||
DFW
(Nationwide)
|
2,725,120
|
3,823,619
|
(1,098,499
|
)
|
||||||
AFN
(includes US1)
|
2,136,987
|
1,632,488
|
504,499
|
|||||||
InReach
|
1,095,400
|
—
|
1,095,400
|
|||||||
Kite
Networks
|
71,727
|
4,137
|
67,590
|
|||||||
Total
Revenues
|
$
|
23,410,650
|
$
|
26,546,650
|
$
|
(3,136,000
|
)
|
Net
consolidated operating expenses, quarter ended September 30,
2005
|
$
|
12,479,992
|
||
Operating
expenses of InReach
|
575,214
|
|||
Operating
expenses of comparable businesses
|
(1,721,261
|
)
|
||
Stock
compensation charge (adoption of SFAS 123R)
|
471,556
|
|||
Goodwill
impairment charge
|
529,736
|
|||
Restructure
charge
|
(19,832
|
)
|
||
ProGames
costs
|
93,081
|
|||
Net
consolidated operating expenses, quarter ended September 30,
2006
|
$
|
12,408,486
|
||
Net
consolidated operating expenses above
|
$
|
12,408,486
|
||
Cost
of services
|
13,137,246
|
|||
Depreciation
and amortization
|
1,448,892
|
|||
Consolidated
operating costs and expenses, quarter ended September
30, 2006
|
$
|
26,994,624
|
Type
of Debt
|
|
2006
|
|
2005
|
|||
Notes
payable to Cornell Capital
|
$
|
—
|
$
|
198,049
|
|||
SEDA
draw discounts
|
—
|
142,847
|
|||||
Convertible
debentures (at stated rate)
|
312,541
|
302,781
|
|||||
Discount
amortization amounts
|
149,115
|
100,376
|
|||||
Other,
net
|
65,284
|
(45,718
|
)
|
||||
Interest
Expense, net
|
$
|
526,940
|
$
|
698,335
|
Company
|
2006
|
2005
|
Change
|
|||||||
Davel
|
$
|
16,762,255
|
$
|
22,187,052
|
$
|
(5,424,797
|
)
|
|||
CloseCall
(includes Affinity)
|
11,778,334
|
13,852,722
|
(2,074,388
|
)
|
||||||
Kite
Broadband
|
5,876,580
|
3,385,314
|
2,491,266
|
|||||||
DFW
(Nationwide)
|
5,705,958
|
7,861,019
|
(2,155,061
|
)
|
||||||
AFN
(includes US1)
|
4,168,273
|
1,756,258
|
2,412,015
|
|||||||
InReach
|
2,334,995
|
-
|
2,334,995
|
|||||||
Kite
Networks
|
127,041
|
10,130
|
116,911
|
|||||||
Total
Revenues
|
$
|
46,753,436
|
$
|
49,052,495
|
$
|
(2,299,059
|
)
|
Net
consolidated operating expenses, six months ended September 30,
2005
|
$
|
21,790,231
|
||
Operating
expenses of acquired companies
|
3,215,965
|
|||
Operating
expenses of comparable businesses
|
(1,879,693
|
)
|
||
Stock
compensation charge (adoption of SFAS 123R)
|
956,647
|
|||
Goodwill
impairment charges
|
877,854
|
|||
Restructure
charges
|
283,839
|
|||
Write-off
of investment banking fees
|
165,886
|
|||
ProGames
costs
|
181,505
|
|||
Net
consolidated operating expenses, six months ended September 30,
2006
|
$
|
25,592,234
|
||
Net
consolidated operating expenses above
|
$
|
25,592,234
|
||
Cost
of services
|
25,899,204
|
|||
Depreciation
and amortization
|
2,779,803
|
|||
Consolidated
operating costs and expenses, six months ended September
30, 2006
|
$
|
54,271,241
|
Type
of Debt
|
|
2006
|
|
2005
|
|||
Notes
payable to Cornell Capital
|
$
|
25,074
|
$
|
432,361
|
|||
SEDA
draw discounts
|
137,795
|
237,805
|
|||||
Convertible
debentures (at stated rate)
|
602,370
|
460,753
|
|||||
Discount
amortization amounts
|
246,254
|
150,565
|
|||||
Airlie
bridge loan
|
—
|
381,225
|
|||||
Other,
net
|
(90,478
|
)
|
(32,199
|
)
|
|||
Interest
Expense, net
|
$
|
921,015
|
$
|
1,630,510
|
2006
|
|
2005
|
|||||
Net
income/(loss)
|
$
|
(4,110,914
|
)
|
$
|
523,900
|
||
Add
non-EBITDA items included in net
|
|||||||
results:
|
|||||||
Depreciation
and amortization
|
1,448,892
|
1,047,319
|
|||||
Interest
expense, net
|
526,940
|
698,335
|
|||||
Goodwill
impairment and restructuring
|
|||||||
charges
|
509,904
|
—
|
|||||
Stock
compensation expense
|
471,556
|
—
|
|||||
Adjusted
EBITDA
|
$
|
(1,153,622
|
)
|
$
|
2,269,554
|
2006
|
2005
|
||||||
Net
income/(loss)
|
$
|
(8,848,421
|
)
|
$
|
943,092
|
||
Add
non-EBITDA items included in net
|
|||||||
results:
|
|||||||
Depreciation
and amortization
|
2,779,803
|
1,869,696
|
|||||
Interest
expense, net
|
921,015
|
1,630,510
|
|||||
Goodwill
impairment, restructuring
|
|||||||
charges
and write-offs
|
1,416,003
|
—
|
|||||
Stock
compensation expense
|
956,647
|
—
|
|||||
Loss
on debt extinguishment
|
409,601
|
—
|
|||||
Adjusted
EBITDA
|
$
|
(2,365,352
|
)
|
$
|
4,443,298
|
•
|
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.
|
1) |
At
the time that we acquired Davel, there was existing litigation brought
against Davel and other defendants regarding a claim associated with
certain alleged patent infringement. Davel has been named as a defendant
in a civil action captioned Gammino v. Cellco Partnership d/b/a Verizon
Wireless, et al., C.A. No. 04-4303 filed in the United States District
Court for the Eastern District of Pennsylvania. The plaintiff claims
that
Davel and other defendants allegedly infringed its patent involving
the
prevention of fraudulent long-distance telephone calls. Davel does
not
believe that the allegations set forth in the complaint are valid,
continues to assess the validity of the Gammino Patents and continues
to
determine whether the technology purchased by Davel from third parties
infringes upon the Gammino Patents. The plaintiff is seeking monetary
relief of at least $7,500,000. The case is in the discovery phase
of the
litigation.
|
2) |
On
September 10, 2004, CloseCall was served a complaint in an action
captioned Verizon Maryland Inc., Verizon New Jersey Inc., and Verizon
Delaware Inc. in the Circuit Court for Montgomery County, Maryland.
Verizon sued for “in excess of $1,000,000” based on alleged unpaid
invoices for services provided to CloseCall. Verizon asserted that
CloseCall underpaid the Federal Subscriber Line Charges billed by
Verizon,
by applying an uncollectible factor to the amounts charged by Verizon.
In
addition, Verizon contended that CloseCall underpaid the amounts
owed to
Verizon by misapplying the terms of the “merger discount” offered to
CLECs, including CloseCall, as a result of the merger between Bell
Atlantic and GTE.
|
(a) |
The
following exhibits are filed as part of this
report:
|
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 for the quarter ended June 30, 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 for the quarter ended June 30, 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
|
|
10.1
|
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
|
|
10.2
|
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
|
|
10.3
|
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
|
|
10.4
|
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
|
|
10.5
|
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
|
|
10.6
|
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
|
|
10.7
|
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
|
|
10.8
|
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
|
|
10.9
|
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
|
|
10.10
|
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
|
|
10.11
|
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
|
|
1012
|
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
|
|
10.13
|
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
|
|
10.14
|
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
|
|
10.15
|
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
|
|
10.16
|
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
|
|
10.17
|
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
|
|
10.18
|
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
|
|
10.19
|
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
|
|
10.20
|
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
|
|
10.21
|
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
|
|
10.22
|
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
|
|
10.23
|
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
|
|
10.24
|
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
|
|
10.25
|
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
|
|
10.26
|
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
|
|
10.27
|
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
|
|
10.28
|
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
|
|
10.29
|
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
|
|
10.30
|
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
|
|
10.31
|
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
|
|
10.32
|
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
|
|
10.33
|
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
|
|
10.34
|
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
|
|
10.35
|
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
|
|
10.36
|
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 for the quarter ended June 30, 2006
|
||
10.37
|
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 for the quarter ended June 30, 2006
|
||
10.38
|
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
|
||
10.39
|
Securities
Purchase Agreement, dated as of August 28, 2006, by and between the
Company and Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on August 30, 2006
|
|
10.40
|
Secured
Convertible Debenture, issued on August 28, 2006, by the Company
to
Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.2 to the Registrant’s Current Report on Form
8-K filed on August 30, 2006
|
|
10.41
|
Investor
Registration Rights Agreement, dated as of August 28, 2006, by and
between
the Company and Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.4 to the Registrant’s Current Report on Form
8-K filed on August 30, 2006
|
|
10.42
|
Irrevocable
Transfer Agent Instructions dated August 28, 2006 among the Company,
Interwest Transfer Company, Inc. and David Gonzalez, Esq., as Escrow
Agent
|
|
Incorporated
by reference to Exhibit 10.5 to the Registrant’s Current Report on Form
8-K filed on August 30, 2006
|
|
10.43
|
Warrant
issued by the Company to Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.3 to the Registrant’s Current Report on Form
8-K filed on August 30, 2006
|
10.44
|
Amendment
No. 1 to the Securities Purchase Agreement, dated September 20, 2006,
between the Company and Cornell Capital, and the related Convertible
Debenture
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on September 21, 2006
|
|
10.45
|
Amendment
No. 2 to the Securities Purchase Agreement, dated October 23, 2006,
between the Company and Cornell Capital
|
|
Incorporated
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form
8-K filed on October 24, 2006
|
|
31.1
|
Certification
by Jay O. Wright, Chief Executive Officer, pursuant to Rule
13a-14(a)
|
Provided
herewith
|
||
31.2
|
Certification
by Richard H. Deily, Principal Financial Officer, pursuant to Rule
13a-14(a)
|
Provided
herewith
|
||
32.1
|
Certification
by Jay O. Wright, and Richard H. Deily, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002**
|
Provided
herewith
|
||
10.46
|
Master
Equipment Lease dated September 27, 2006, between Data Sales Co.,
Mobilepro Corp., and Kite Networks, Inc.
|
Provided
herewith
|
||
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. | ||
|
|
|
Date: November 14, 2006 | By: | /s/ Jay O. Wright |
Jay O. Wright, Chief Executive Officer |
||
Date: November 14, 2006 | By: | /s/ Richard H. Deily |
Richard H. Deily, Chief Accounting Officer |