MobilePro Corp.
6701 Democracy Blvd., Suite 300, Bethesda, MD 20817
President and CEO: Jay Wright, (301) 315-9040
www.mobileprocorp.com and www.hawkassociates.com
Investor Contact: Frank N. Hawkins, Jr. or Julie Marshall (305) 852-2383 November 24, 2004
MobilePro Closes Davel Acquisition, Adds $50M To Revenue. FY 'Q2 Revenue Up 324.6% Over Prior Quarter.
COMPANY DESCRIPTION
MobilePro Corp. is a wireless technology and broadband telecommunications company based in Bethesda, Maryland with operations in Hurst, Houston, Dallas and Beaumont TX, Shreveport, LA, Kansas City, MO, Coshocton, OH and Janesville, WI. The company is focused on creating shareholder value by developing innovative wireless technologies, acquiring and growing profitable broadband Internet service providers and forging strategic alliances with well-positioned companies in complementary product lines and industries. Since January 2004, MobilePro has announced closed deals, definitive agreements and letters of intent with cumulative expected 2005 calendar revenue of between $100 and $120 million.
The company has formed three operating units that are intended to synergistically build MobilePro into a large telecommunications and technology company. The Telecommunications Division, Nationwide Internet, is supported by eleven ISP subsidiaries and a pipeline for future telecom acquisitions. Telecom industry veteran Kevin Kuykendall is president of MobilePro's Voice Division. The company's Technology Division, NeoReach, owns wireless patents and is developing ZigBee chip technology.
Telecommunications Division
The company currently generates revenue through its Telecommunications Division and expects to realize future revenue from reseller activity in the multi-billion dollar wireless market. Industry experts are forecasting an explosive use of wireless applications over the next decade with users expanding from 23,700 in 2002 to 609,200 in 2004 and exponential growth beyond that. The company is positioning itself to become a profitable participant in this space.
The company is aggressively seeking to acquire additional assets that would be synergistic with these companies. The company says it only considers companies that are cash flow positive with a solid revenue stream and an established customer base.
Voice Division - Voice Over Internet Protocol (VoIP)
MobilePro currently owns 10% of one VoIP company as part of its acquisition of August.net. The company is looking at acquisitions of technology and technology companies that will allow it to leverage its projected ISP customer base by cross-selling VoIP services to broadband customers.
Technology Division
The company is focusing on its ZigBee semiconductor chip and related wireless applications. Zigbee is a wireless standard (802.15.4) for the emerging home, commercial and industrial networking and controls market. Research firm ABI estimates that the home controls wireless market alone could reach $4 billion by 2008. In addition to a new patent application on its semiconductor chip technology, MobilePro's IP portfolio contains five wireless antenna patents and a modem device.
MOBL - OTC BB
Closing Price (11/23/04): $0.155
52 week range: $0.0169 - $0.295
Market Cap. : $50.2 mil.
Basic Shares: 324.0 mil.
Diluted Shares: 349.0 mil.
Est. Public Float: 235.0 mil.
Average Daily Trading : 2,735,818
FY 'Q2 Revenue: $4,968.069
FY 'Q2 Net Loss: ($1,747,761)
FY 'Q2 EPS: ($0.01)
Total Assets (9/30/04): $34.6 mil.
Total Liabilities (9/30/04): $29.2 mil.
Insider Ownership: 16.7%
Fiscal Year End: March 31
RECENT KEY DEVELOPMENTS
11/24/04 Jay Wright to appear on radio show 'Corporate Strategies with Tim Connolly.'
11/15/04 MobilePro completes Davel transaction, adds $50 mil. to revenue.
11/15/04 Q2 '05 revenue $4.97 mil. vs. $1.17 mil. in Q1 '05. Q2 '05 net loss ($1,747,761), or ($0.01) per share vs. ($757,439), or ($0.003) per share in Q1 '05.
11/08/04 MobilePro hires Geoffrey Amend as General Counsel.
10/29/04 MobilePro achieves ZigBee milestone.
10/18/04 MobilePro closes acquisition of CloseCall America.
9/30/04 MobilePro issues letter to shareholders.
9/23/04 MobilePro forms strategic alliance with Global Triad.
9/21/04 MobilePro signs LOI for New Hampshire ISP.
9/17/04 MobilePro acquires Arizona ISP.
9/15/04 MobilePro closes acquisition Houston ISP.
9/13/04 MobilePro subsidiary Affinity Telecom launches partnership with Eastern Michigan University.
9/07/04 MobilePro signs definitive acquisition agreement with Davel creditors to acquire 25,000 locations and 42,000 payphones to create nationwide wireless network.
8/13/04 Q1 '05 revenue $1.17 mil. vs. $0 in Q1 '04. Q1 '05 net loss ($757,439), or ($0.003) per share vs. ($377,400), or ($0.01) in Q1 '04.
6/29/04 FY 2004 revenue $311,355 vs. $0 in FY '03. FY '04 operating loss $2,157,844 vs. $9,771,389 in FY 2003. Cash position at year end FY '04 nearly $2 million.
MANAGEMENT TEAM
- Jay Wright, CEO, recently served as CFO for Technical and Management Services Corporation. Previously served as CFO of Speedcom Wireless Corp, an investment banker with Merrill Lynch and as a M&A attorney.
- Kurt Gordon, CFO, previously CFO of TARGUS Information Corp., has over 14 years of experience in finance and operations. Previously served as a public accountant with Ernst & Young.
- Kevin Kuykendall, President of Voice Division, recently CEO of NexGen Telecommunications, LLC and Discovery Telecommunications, Inc. Previously served as president and COO of FNET Corporation.
Geoffrey Amend, General Counsel, previously practiced corporate and securities law. Private practice specializing in telecommunications, Internet and systems integration since 1994. Advisory Board
- Paul B. Silverman, chairman, Over 30 years senior management experience in the global information and telecommunications industry.
- Mike O'Neil: Merrill Lynch veteran has expertise in raising of debt and equity capital, project financing and advising young technology companies.
- Larry D. Bouts: Former chairman and chief executive of Six Flags, senior advisor to IndiGo Ventures, L.L.C., a venture capital and advisory firm focused on growing technology companies
- John von Harz: Wireless antenna expert, previously EVP of Conifer Corporation, a privately held wireless antenna firm.
- Chris MacFarland: Senior vice president and chief technology officer of Allegiance Telecom. Has expertise in developing strategic vendor requirements and overseeing key engineering initiatives.
- Don Gunther: Former vice chairman of Bechtel Group, Inc., a $14 billion global engineering and construction company.
- Fred Tarter: Chairman of Radio Free Europe Foundation and The Lakeside Group LLC.
THE OUTLOOK
The company is pursuing targeted, complementary alliances and potential acquisitions to accelerate its rapidly growing telecommunications base. MobilePro's newly formed Nationwide Internet Division and its newly acquired ISP subsidiaries currently generate over $100 million in annual revenue. The acquisition of CloseCall America significantly transforms MobilePro financially and will enable the company to offer an expanded array of products and services including bundled local and long distance, cellular, VoIP, DSL and other value-added products to the rapidly growing customer base. MobilePro now has CLEC, LD and Internet licenses in all 48 contiguous states as well as Puerto Rico. Davel is MobilePro's 14th deal closed in 2004.
Davel adds more than $50 million to MobilePro’s annualized revenue and $0.015 per share to calendar 2005 earnings and significantly increases expected cash flow from operations. The acquisition includes some 42,000 payphones at over 25,000 locations in 45 states and the District of Columbia, providing MobilePro with a major real estate platform as a base for building a national wireless telecommunications network.
A Greenwich, Conn.-based hedge fund, provided mezzanine debt financing to MobilePro for the transaction. The debt is not convertible into equity. The fund also received 5.6 million warrants to purchase MobilePro common stock with an exercise price of 20 cents per share.
The strategy for the company's Telecommunications Division is to continue building revenue, cash flow and customers. With a sufficiently large customer base, the company intends to implement a Voice Over Internet Protocol (VoIP) strategy, integrate its operations, opportunistically expand wireless operations, create a national branding strategy and drive operating costs down and operating margins up to create a significant new player in the telecom marketplace.
On the technology front, MobilePro has completed the design of its first Zigbee wireless semiconductor chip. The company is currently looking at partnership opportunities to best leverage its intellectual property in the Zigbee area, while it seeks to monetize the remainder of its IP portfolio via licensing or joint venture.
The company recently announced a plan to distribute 3,073,113 shares of Solution Technology International, Inc. common stock. Shareholders are expected to receive one share of registered STI stock for approximately every 93 shares of MobilePro stock based on existing shares outstanding and certain warrants. The record date for the stock dividend has been tentatively set for September 15, 2004. The company said issuing a property dividend of 60% of its equity stake in STI allows shareholders to participate in its strategic relationship with this young software company. The company expects to offer similar opportunities to its shareholders in the future.
MobilePro has announced closed deals, definitive agreements and letters of intent with cumulative expected 2005 calendar revenue of between $100 and $120 million.
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