(Mark One)
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT
OF 1934
|
FOR
THE PERIOD ENDING SEPTEMBER 30, 2008
|
|
OR
|
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT
OF 1934
|
FOR
THE TRANSITION PERIOD FROM _________ TO
_________
|
|
COMMISSION
FILE NUMBER
0 – 1325
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
September 30,
2008
|
September 30,
2007
|
September 30,
2008
|
September 30,
2007
|
||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||
REVENUES
|
$
|
12,340,659
|
$
|
3,653,600
|
$
|
28,860,595
|
$
|
11,960,281
|
|||||
COSTS
AND EXPENSES
|
|||||||||||||
Cost
of products and services (exclusive of depreciation and amortization
shown
separately below)
|
8,556,168
|
2,345,895
|
18,769,937
|
6,395,179
|
|||||||||
Selling,
general and administrative
|
2,757,319
|
2,360,254
|
7,173,357
|
7,057,936
|
|||||||||
Depreciation
and amortization
|
846,317
|
770,215
|
2,463,079
|
2,814,981
|
|||||||||
Impairment
of assets
|
-
|
-
|
65,452
|
-
|
|||||||||
Total
costs and expenses
|
12,159,804
|
5,476,364
|
28,471,825
|
16,268,096
|
|||||||||
INCOME
(LOSS) FROM OPERATIONS
|
180,855
|
(1,822,764
|
)
|
388,770
|
(4,307,815
|
)
|
|||||||
OTHER
INCOME (EXPENSE)
|
|||||||||||||
Interest
expense
|
(300,826
|
)
|
(108,847
|
)
|
(514,485
|
)
|
(430,264
|
)
|
|||||
Management
consulting income
|
1,446,938
|
-
|
1,446,938
|
-
|
|||||||||
Other
income
|
8,109
|
13,267
|
80,699
|
177,361
|
|||||||||
Total
other income (expense)
|
1,154,221
|
(95,580
|
)
|
1,013,152
|
(252,903
|
)
|
|||||||
INCOME
(LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST IN
SUBSIDIARY
|
1,335,076
|
(1,918,344
|
)
|
1,401,922
|
(4,560,718
|
)
|
|||||||
PROVISION
FOR INCOME TAXES
|
286,658
|
-
|
749,458
|
-
|
|||||||||
MINORITY
INTEREST IN NET INCOME OF SUBSIDIARY
|
137,755
|
-
|
549,758
|
-
|
|||||||||
NET
INCOME (LOSS)
|
910,663
|
(1,918,344
|
)
|
102,706
|
(4,560,718
|
)
|
|||||||
Preferred
stock dividends
|
64,014
|
1,793,297
|
4,048,696
|
2,153,698
|
|||||||||
INCOME
(LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
846,649
|
$
|
(3,711,641
|
)
|
$
|
(3,945,990
|
)
|
$
|
(6,714,416
|
)
|
||
INCOME
(LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE -
BASIC
|
$
|
.09
|
$
|
(.50
|
)
|
$
|
(.43
|
)
|
$
|
(.94
|
)
|
||
INCOME
(LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS PER COMMON SHARE -
DILUTED
|
$
|
.09
|
$
|
(.50
|
)
|
$
|
(.43
|
)
|
$
|
(.94
|
)
|
||
Weighted
average shares outstanding – basic
|
9,561,718
|
7,356,413
|
9,184,475
|
7,177,435
|
|||||||||
Weighted
average shares outstanding – diluted
|
9,796,685
|
7,356,413
|
9,184,475
|
7,177,435
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||
September
30,
2008
|
September
30,
2007
|
September
30,
2008
|
September
30,
2007
|
||||||||||
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||
NET
INCOME (LOSS)
|
$
|
910,663
|
$
|
(1,918,344
|
)
|
$
|
102,706
|
$
|
(4,560,718
|
)
|
|||
OTHER
COMPREHENSIVE INCOME (LOSS), NET OF TAX:
|
|||||||||||||
Unrealized
gains(losses) on securities:
|
|||||||||||||
Unrealized
holding gains(losses) arising during period
|
-
|
-
|
151,978
|
-
|
|||||||||
COMPREHENSIVE
INCOME (LOSS)
|
$
|
910,663
|
$
|
(1,918,344
|
)
|
$
|
254,684
|
$
|
(4,560,718
|
)
|
|
September 30,
2008
|
December 31,
2007
|
|||||
(unaudited)
|
(audited)
|
||||||
ASSETS
|
|||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
11,092,373
|
$
|
944,456
|
|||
Accounts
receivable, net
|
3,340,501
|
1,560,123
|
|||||
Securities
available for sale
|
151,978
|
-
|
|||||
Inventories
|
2,128,393
|
132,992
|
|||||
Prepaid
expenses and other
|
343,280
|
135,589
|
|||||
Current
portion of notes receivable
|
61,418
|
59,861
|
|||||
Total
Current Assets
|
17,117,943
|
2,833,021
|
|||||
PROPERTY
AND EQUIPMENT, NET
|
1,306,054
|
1,769,261
|
|||||
OTHER
ASSETS
|
|||||||
Goodwill
|
116,757
|
16,757
|
|||||
Intangible
assets, net
|
5,107,154
|
4,072,076
|
|||||
Notes
receivable – long-term, net
|
38,856
|
-
|
|||||
Other
assets
|
455,432
|
202,314
|
|||||
Total
Other Assets
|
5,718,199
|
4,291,147
|
|||||
TOTAL
ASSETS
|
$
|
24,142,196
|
$
|
8,893,429
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES
|
|||||||
Mandatory
redeemable preferred stock, 16,200 and 22,026 Class F preferred
shares
|
$
|
162,000
|
$
|
220,256
|
|||
Current
portion of long-term debt
|
1,644,633
|
1,658,342
|
|||||
Current
portion of capital lease obligations
|
244,354
|
225,291
|
|||||
Accounts
payable
|
8,466,643
|
2,950,596
|
|||||
Accrued
liabilities – short term
|
3,179,204
|
2,531,611
|
|||||
Customer
deposits
|
60,582
|
60,582
|
|||||
Deferred
service obligations and revenue
|
985,232
|
204,520
|
|||||
Total
Current Liabilities
|
14,742,648
|
7,851,198
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Long-term
debt, net
|
807,943
|
118,924
|
|||||
Capital
lease obligations, net of current portion
|
149,796
|
249,469
|
|||||
Accrued
liabilities – long term
|
74,243
|
-
|
|||||
Total
Liabilities
|
15,774,630
|
8,219,591
|
|||||
COMMITMENTS
AND CONTINGENCIES
|
|||||||
MINORITY
INTEREST
|
3,387,917
|
-
|
|||||
STOCKHOLDERS'
EQUITY
|
|||||||
Cumulative
convertible preferred stock, no par value:
|
|||||||
8%
Class A (21,328 and 24,728 shares issued and outstanding, $223,944
and
$259,644 liquidation preference)
|
320,708
|
371,708
|
|||||
10%
Class B (2,870 and 3,770 shares issued and outstanding, $30,135 and
$39,585 liquidation preference)
|
28,700
|
37,700
|
|||||
10%
Class C (114,380 and 120,250 shares issued and outstanding, $1,143,800
and
$1,202,500 liquidation preference)
|
1,486,082
|
1,548,352
|
|||||
10%
Class F (150,000 shares issues and outstanding, $1,500,000 liquidation
preference)
|
1,500,000
|
1,500,000
|
|||||
8%
Class G (11,595 and 26,595 shares issued and outstanding, $115,950
and
$265,950 liquidation preference)
|
47,970
|
111,468
|
|||||
6%
Class H (2.0 shares issued and outstanding, $200,000 liquidation
preference)
|
-
|
-
|
|||||
Variable
rate % Class I (0 and 39,500 shares issued and outstanding, $0 and
$3,950,000 liquidation preference)
|
-
|
-
|
|||||
Common
stock, no par value (9,603,294 and 7,451,891 shares issued and
outstanding)
|
37,614,598
|
29,574,673
|
|||||
Stock
subscriptions receivable
|
(98,453
|
)
|
(170,888
|
)
|
|||
Options
and warrants
|
46,024,617
|
45,871,964
|
|||||
Accumulated
comprehensive income – unrealized gain on securities available for
sale
|
151,978
|
-
|
|||||
Accumulated
deficit
|
(82,096,551
|
)
|
(78,171,139
|
)
|
|||
Total
Stockholders' Equity
|
4,979,649
|
__
_673,838
|
|||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$
|
24,142,196
|
$
|
8,893,429
|
Nine Months Ended
|
|||||||
September 30,
2008
|
September 30,
2007
|
||||||
(unaudited)
|
(unaudited)
|
||||||
OPERATING
ACTIVITIES
|
|||||||
Net
income (loss)
|
$
|
102,706
|
$
|
(4,560,718
|
)
|
||
Adjustments
to reconcile net income (loss) to net cash flows from operating
activities
|
|||||||
Depreciation
and amortization
|
2,463,079
|
2,829,277
|
|||||
Minority
interest in net income of consolidated subsidiary
|
549,758
|
-
|
|||||
Impairment
of intangibles
|
65,452
|
-
|
|||||
Amortization
of original issue discount
|
-
|
29,746
|
|||||
Amortization
of imputed interest discount
|
218,912
|
-
|
|||||
Loss
on sale of property and equipment and intangible assets
|
51,807
|
150,582
|
|||||
Warrants
issued for services
|
-
|
42,300
|
|||||
Gain
on debt extinguishment
|
(29,965
|
)
|
(118,040
|
)
|
|||
Stock
based compensation expense for future services
|
152,653
|
549,434
|
|||||
Stock
based compensation expense for services
|
18,555
|
-
|
|||||
Compensation
expense of restricted stock awards
|
23,625
|
-
|
|||||
Management
consulting income from DirecTECH
|
(1,446,938
|
)
|
-
|
||||
Change
in allowance for doubtful accounts on accounts receivable
|
(15,000
|
)
|
(97,500
|
)
|
|||
Change
in reserve for stock subscriptions and interest receivable
|
8,102
|
45,000
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
887,553
|
373,588
|
|||||
Inventories
|
220,666
|
191,933
|
|||||
Prepaid
expenses and other
|
(52,275
|
)
|
182,272
|
||||
Other
assets
|
120,527
|
(13,051
|
)
|
||||
Accounts
payable and accrued liabilities
|
(228,829
|
)
|
(320,485
|
)
|
|||
Customer
deposits
|
-
|
(750
|
)
|
||||
Deferred
service obligations and revenue
|
780,712
|
(591,000
|
)
|
||||
Liabilities
of discontinued operations
|
-
|
(125,000
|
)
|
||||
Net
cash flows from (used by) operating activities
|
3,891,100
|
(1,432,412
|
)
|
||||
INVESTING
ACTIVITIES
|
|||||||
Purchases
of property and equipment
|
(112,253
|
)
|
(271,588
|
)
|
|||
Cash
acquired via purchase of Michigan Microtech, Inc.
|
4,043,942
|
-
|
|||||
Cash
collected on other receivables – related parties acquired via the purchase
of Michigan Microtech, Inc.
|
2,815,488
|
-
|
|||||
Purchase
of US Install
|
(101,000
|
)
|
-
|
||||
Proceeds
from sale of property and equipment and intangible assets
|
5,695
|
2,639,869
|
|||||
Collections
on notes receivable
|
4,601
|
4,802
|
|||||
Net
cash flows from investing activities
|
6,656,473
|
2,373,083
|
|||||
FINANCING
ACTIVITIES
|
|||||||
Checks
issued in excess of cash in bank
|
-
|
(319,244
|
)
|
||||
Payments
on long-term debt
|
(83,683
|
)
|
(146,405
|
)
|
|||
Payments
on capital lease obligations
|
(152,241
|
)
|
(191,405
|
)
|
|||
Payments
on note payable to stockholder
|
-
|
(24,739
|
)
|
||||
Payments
on mandatory redeemable preferred stock
|
(58,256
|
)
|
(52,744
|
)
|
|||
Payments
for stock issuance costs
|
(25,379
|
)
|
(25,916
|
)
|
|||
Payments
received on stock subscriptions receivable
|
3,000
|
62
|
|||||
Proceeds
from issuance of long term debt
|
100,000
|
-
|
|||||
Redemption
of preferred stock
|
(101,700
|
)
|
(77,099
|
)
|
|||
Preferred
stock dividends
|
(81,397
|
)
|
(40,217
|
)
|
|||
Net
cash flows used by financing activities
|
(399,656
|
)
|
(877,707
|
)
|
|||
INCREASE
IN CASH AND CASH EQUIVALENTS
|
10,147,917
|
62,964
|
|||||
CASH
AND CASH EQUIVALENTS
|
|||||||
Beginning
of period
|
944,456
|
1,020,975
|
|||||
End
of period
|
$
|
11,092,373
|
$
|
1,083,939
|
Nine Months Ended
|
|||||||
September 30,
2008
|
September 30,
2007
|
||||||
(unaudited)
|
(unaudited)
|
||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|||||||
Cash
paid for interest, net of amortization of original issue discount
and
imputed interest discount
|
$
|
198,749
|
$
|
411,477
|
|||
Cash
paid for federal and state income taxes
|
681,500
|
-
|
|||||
SUPPLEMENTAL
DISCLOSURES OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
|
|||||||
Conversion
of Class I preferred stock into common stock
|
3,744,600
|
-
|
|||||
Conversion
of Class G preferred stock into common stock
|
150,000
|
-
|
|||||
Conversion
of accrued interest into common stock
|
2,000
|
15,680
|
|||||
Conversion
of accrued dividends into common stock
|
175,412
|
534,879
|
|||||
Intrinsic
value of preferred dividends
|
84,068
|
13,884
|
|||||
Purchase
of property and equipment via increase of capital lease
obligations
|
46,867
|
-
|
|||||
Purchase
of US Install via increase in accrued expenses
|
102,516
|
-
|
|||||
Acquisition
of securities available for sale upon expiration of contingent
rights
|
208,969
|
-
|
|||||
Reduction
of stock subscription receivable via cancellation of common
stock
|
61,333
|
-
|
|||||
Debt
and accrued interest paid with issuance of common stock
|
19,500
|
-
|
|||||
Purchase
of 51% of Michigan Microtech, Inc. via issuance of notes payable
and
common stock, net of discount for imputed interest
|
5,782,690
|
-
|
|||||
Sale
of property, equipment and intangible to DirecTECH for other current
asset
|
-
|
||||||
Debt
reduced by reduction in other receivable from DirecTECH
|
1,446,938
|
-
|
|||||
Conversion
of preferred stock into common stock
|
-
|
1,706,400
|
|||||
Notes
payable and other liens paid by MDUC as part of asset sale
|
-
|
1,713,785
|
|||||
Debt
and interest assumed by DirecTECH as part of asset sale
|
-
|
267,143
|
|||||
Common
stock issued for services to be rendered
|
157,500
|
164,337
|
|||||
Note
payable issued for services to be rendered
|
-
|
44,407
|
1.
|
Reduction
of operating expenses by controlling payroll, professional fees
and other
general and administrative
expenses.
|
2.
|
Sale
of video assets on a strategic basis. The Company, based on recent
transactions, believes there is an active market for its video
subscriber
assets. The Company believes it can sell these assets, under certain
circumstances, at prices at or above their current carrying value.
However, there is no guarantee these sales will ultimately be favorable
to
the Company.
|
3.
|
Solicit
additional equity investment in the Company by either issuing preferred
or
common stock.
|
4.
|
Continue
to market Multiband services and acquire additional multi-dwelling
unit
customers.
|
5.
|
Control
capital expenditures by contracting Multiband services and equipment
through a landlord-owned equipment
program.
|
6.
|
Delivery
of video services to residents of single family homes. Effective
March 1,
2008, the Company purchased 51% of the outstanding stock of Michigan
Microtech, Inc. (MMT), formerly a wholly owned subsidiary of DirecTECH
Holding Company Inc. (DTHC) (see Note 4 and Note 13). MMT installs
DirecTV
video services in single family homes. Historically MMT has been
profitable. The Company anticipates that by combining MMT operations
with
Multiband operations that it will achieve a beneficial impact to
its
consolidated cash flows and operating results. However, there is
no
guarantee that these combined results will ultimately be favorable
to the
Company.
|
7.
|
Expansion
of call center support via sales of call center services to both
existing
and future system operators and to buyers of the Company’s video
subscribers.
|
September
30, 2008
|
December
31, 2007
|
||||||||||||
Gross
Carrying
|
Accumulated
|
Gross
Carrying
|
Accumulated
|
||||||||||
Amount
|
Amortization
|
Amount
|
Amortization
|
||||||||||
Intangible
assets subject to amortization
|
|||||||||||||
Right
of entry contracts
|
$
|
800,741
|
$
|
503,735
|
$
|
993,393
|
$
|
618,027
|
|||||
Contracts
with DirecTV
|
12,547,145
|
7,714,260
|
9,697,879
|
6,001,169
|
|||||||||
Customer
contracts
|
102,516
|
59,801
|
-
|
-
|
|||||||||
Total
|
13,450,402
|
8,277,796
|
10,691,272
|
6,619,196
|
|||||||||
Impairment
of intangibles
|
-
|
65,452
|
-
|
-
|
|||||||||
Total
including impairment
|
$
|
13,450,402
|
$
|
8,343,248
|
$
|
10,691,272
|
$
|
6,619,196
|
Three months ended
|
Nine months ended
|
||||||||||||
September 30,
2008
|
September 30,
2007
|
September 30,
2008
|
September 30,
2007
|
||||||||||
Risk-free
interest rate
|
3.15
|
%
|
4.50
|
%
|
3.15
|
%
|
4.58
|
%
|
|||||
Expected
life of options granted
|
6.5
Years
|
10
Years
|
6.5
Years
|
10
Years
|
|||||||||
Expected
volatility range
|
95
|
%
|
236
|
%
|
94
|
%
|
236
|
%
|
|||||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
0
|
%
|
0
|
%
|
Three months ended
|
Nine months ended
|
||||||||||||
September 30,
2008
|
September 30,
2007
|
September 30,
2008
|
September 30,
2007
|
||||||||||
Numerator:
Income (loss) attributable to common stockholders
|
$
|
846,649
|
$
|
(3,711,641
|
)
|
$ |
(3,945,990
|
)
|
$
|
(6,714,416
|
)
|
||
Denominator:
|
|||||||||||||
Weighted-average
shares outstanding
|
9,561,718
|
7,356,413
|
9,184,475
|
7,177,435
|
|||||||||
Effect
of dilutive securities
|
234,967
|
-
|
-
|
-
|
|||||||||
Denominator
for diluted earnings per share
|
9,796,685
|
7,356,413
|
9,184,475
|
7,177,435
|
|||||||||
Basic
earnings (loss) per share
|
$
|
.09
|
$
|
(.50
|
)
|
$
|
(.43
|
)
|
$
|
(.94
|
)
|
||
Diluted
earnings (loss) per share
|
$
|
.09
|
$
|
(.50
|
)
|
$
|
(.43
|
)
|
$
|
(.94
|
)
|
Intangible
assets
|
$
|
102,516
|
||
Goodwill
|
100,000
|
|||
Total
assets acquired
|
202,516
|
2007
Consolidated
as reported
|
2007
Pro Forma
Disclosed
|
||||||
Three
months ended September 30, 2007
|
|||||||
Revenues
|
$
|
3,653,600
|
$
|
10,622,338
|
|||
Loss
from operations
|
(1,822,764
|
)
|
(1,511,477
|
)
|
|||
Net
Loss
|
(1,918,344
|
)
|
(1,732,972
|
)
|
|||
Preferred
dividends
|
1,793,297
|
1,793,297
|
|||||
Loss
attributable to common shareholders
|
$
|
(3,711,641
|
)
|
$
|
(3,526,269
|
)
|
|
Loss
attributable to common shareholders per common share– basic and
diluted
|
$
|
(.50
|
)
|
$
|
(.40
|
)
|
|
Weighted
average shares outstanding - basic and diluted
|
7,356,413
|
8,846,413
|
2008
Consolidated
as reported
|
2008
Pro Forma
Disclosed
|
2007
Consolidated
as reported
|
2007
Pro Forma
Disclosed
|
||||||||||
Nine
months ended September 30, 2008 and 2007
|
|||||||||||||
Revenues
|
$
|
28,860,595
|
$
|
33,260,475
|
$
|
11,960,281
|
$
|
30,236,120
|
|||||
Income
(loss) from operations
|
388,770
|
592,305
|
(4,307,815
|
)
|
(5,317,760
|
)
|
|||||||
Net
income (loss)
|
102,706
|
246,029
|
(4,560,718
|
)
|
(5,312,504
|
)
|
|||||||
Preferred
stock dividends
|
4,048,696
|
4,048,696
|
2,153,698
|
2,153,698
|
|||||||||
Loss
attributable to common shareholders
|
$
|
(3,945,990
|
)
|
$
|
(3,802,667
|
)
|
$
|
(6,714,416
|
)
|
$
|
(7,466,202
|
)
|
|
Loss
attributable to common shareholders per common share – basic and
diluted
|
$
|
(.43
|
)
|
$
|
(.41
|
)
|
$
|
(.94
|
)
|
$
|
(.86
|
)
|
|
Weighted
average shares outstanding – basic and diluted
|
9,184,475
|
9,353,051
|
7,177,435
|
8,667,435
|
September 30,
2008
|
December 31,
2007
|
||||||
DirecTV
– serialized
|
$
|
1,028,154
|
$
|
-
|
|||
DirecTV
– nonserialized
|
667,435
|
-
|
|||||
Other
|
432,804
|
132,992
|
|||||
Total
|
$
|
2,128,393
|
$
|
132,992
|
Unrealized
Gains on
Securities
|
||||
Balance,
December 31, 2007
|
$
|
-
|
||
Initial
investment
|
121,582
|
|||
Increase
in value, for the nine months ended
|
30,396
|
|||
Balance,
September 30, 2008
|
$
|
151,978
|
Number of
Warrants
|
Weighted – Average
Exercise Price
|
||||||
Outstanding,
December 31, 2007
|
3,088,873
|
$
|
7.64
|
||||
Granted
|
-
|
-
|
|||||
Exercised
|
-
|
-
|
|||||
Cancelled
|
(1,605,310
|
)
|
(7.90
|
)
|
|||
Outstanding,
September 30, 2008
|
1,483,563
|
$
|
7.26
|
September 30,
2008
|
December 31,
2007
|
||||||
Payroll
and related taxes
|
$
|
1,571,249
|
$
|
512,960
|
|||
Accrued
preferred stock dividends
|
623,750
|
642,395
|
|||||
Accrued
liability - vendor chargebacks
|
-
|
630,800
|
|||||
Accrued
income taxes
|
145,647
|
-
|
|||||
Accrued
interest payable – short term
|
31,724
|
27,363
|
|||||
Other
|
806,834
|
718,093
|
|||||
Total
accrued liabilities – short term
|
3,179,204
|
2,531,611
|
|||||
Accrued
interest payable – long term
|
74,243
|
-
|
|||||
Total
Accrued Liabilities
|
$
|
3,253,447
|
$
|
2,531,611
|
Multiband
Corp.
|
MDU
|
MCS
|
HSP
|
Total
|
||||||||||||
Three
months ended September 30, 2008:
|
||||||||||||||||
Revenues
|
$
|
-
|
$
|
4,148,786
|
$
|
799,445
|
$
|
7,392,428
|
$
|
12,340,659
|
||||||
Income
(loss) from operations
|
(546,911
|
)
|
838,401
|
(674,349
|
)
|
563,714
|
180,855
|
|||||||||
Identifiable
assets
|
4,675,491
|
4,261,614
|
2,328,163
|
12,876,928
|
24,142,196
|
|||||||||||
Depreciation
and amortization
|
276,907
|
396,650
|
163,782
|
8,978
|
846,317
|
|||||||||||
Capital
expenditures
|
21,497
|
-
|
14,205
|
10,575
|
46,277
|
Multiband
Corp.
|
MDU
|
MCS
|
HSP
|
Total
|
||||||||||||
Three
months ended September 30, 2007:
|
||||||||||||||||
Revenues
|
$
|
-
|
$
|
2,569,486
|
$
|
1,084,114
|
$
|
-
|
$
|
3,653,600
|
||||||
Income
(loss) from operations
|
(1,038,768
|
)
|
461,068
|
(1,245,064
|
)
|
-
|
(1,822,764
|
)
|
||||||||
Identifiable
assets
|
1,897,511
|
5,392,234
|
2,885,771
|
-
|
10,175,516
|
|||||||||||
Depreciation
and amortization
|
39,846
|
397,850
|
332,519
|
-
|
770,215
|
|||||||||||
Capital
expenditures
|
1,987
|
-
|
28,720
|
-
|
30,707
|
Multiband
Corp.
|
MDU
|
MCS
|
HSP
|
Total
|
||||||||||||
Nine
months ended September 30, 2008:
|
||||||||||||||||
Revenues
|
$
|
-
|
$
|
10,395,193
|
$
|
2,488,473
|
$
|
15,976,929
|
$
|
28,860,595
|
||||||
Income
(loss) from operations
|
(2,290,096
|
)
|
2,701,269
|
(1,875,140
|
)
|
1,852,737
|
388,770
|
|||||||||
Identifiable
assets
|
4,675,491
|
4,261,614
|
2,328,163
|
12,876,928
|
24,142,196
|
|||||||||||
Depreciation
and amortization
|
693,165
|
1,189,380
|
560,514
|
20,020
|
2,463,079
|
|||||||||||
Capital
expenditures
|
43,162
|
-
|
58,516
|
10,575
|
112,253
|
Multiband
Corp.
|
MDU
|
MCS
|
HSP
|
Total
|
||||||||||||
Nine
months ended September 30, 2007:
|
||||||||||||||||
Revenues
|
$
|
-
|
$
|
7,619,689
|
$
|
4,340,592
|
$
|
-
|
$
|
11,960,281
|
||||||
Income
(loss) from operations
|
(3,220,516
|
)
|
2,508,408
|
(3,595,707
|
)
|
-
|
(4,307,815
|
)
|
||||||||
Identifiable
assets
|
1,897,511
|
5,392,234
|
2,885,771
|
-
|
10,175,516
|
|||||||||||
Depreciation
and amortization
|
139,573
|
1,208,592
|
1,466,816
|
-
|
2,814,981
|
|||||||||||
Capital
expenditures
|
1,987
|
-
|
269,601
|
-
|
271,588
|
DOLLAR AMOUNTS AS A
PERCENTAGE OF REVENUES
|
DOLLAR AMOUNTS AS A
PERCENTAGE OF REVENUES
|
||||||||||||
THREE MONTHS ENDED
|
NINE MONTHS ENDED
|
||||||||||||
September 30,
2008
(unaudited)
|
September 30,
2007
(unaudited)
|
September 30,
2008
(unaudited)
|
September 30,
2007
(unaudited)
|
||||||||||
REVENUES
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
|||||
COST
OF PRODUCTS & SERVICES (Exclusive of depreciation and amortization
shown below)
|
69.3
|
%
|
64.2
|
%
|
65.0
|
%
|
53.5
|
%
|
|||||
SELLING,
GENERAL & ADMINISTRATIVE
|
22.3
|
%
|
64.6
|
%
|
24.9
|
%
|
59.0
|
%
|
|||||
DEPRECIATION
& AMORTIZATION
|
6.9
|
%
|
21.1
|
%
|
8.5
|
%
|
23.5
|
%
|
|||||
IMPAIRMENT
OF ASSETS
|
-
|
-
|
0.2
|
%
|
-
|
||||||||
INCOME
(LOSS) FROM OPERATIONS
|
1.5
|
%
|
-49.9
|
%
|
1.4
|
%
|
-36.0
|
%
|
|||||
INTEREST
EXPENSE & OTHER, NET
|
9.3
|
%
|
-2.6
|
%
|
3.5
|
%
|
-2.1
|
%
|
|||||
INCOME
(LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST IN
SUBSIDIARY
|
10.8
|
%
|
-52.5
|
%
|
4.9
|
%
|
-38.1
|
%
|
|||||
PROVISION
FOR INCOME TAXES
|
2.3
|
%
|
-
|
2.6
|
%
|
-
|
|||||||
MINORITY
INTEREST IN NET INCOME OF SUBSIDIARY
|
1.1
|
%
|
-
|
1.9
|
%
|
-
|
|||||||
NET
INCOME (LOSS)
|
7.4
|
%
|
-52.5
|
%
|
0.4
|
%
|
-38.1
|
%
|
1. |
Reduction
of operating expenses by controlling payroll, professional fees and
other
general and administrative
expenses.
|
2. |
Sale
of video assets on a strategic basis. The Company, based on recent
transactions, believes there is an active market for its video subscriber
assets. The Company believes it can sell these assets, under certain
circumstances, at prices at or above their current carrying value.
However, there is no guarantee these sales will ultimately be favorable
to
the Company.
|
3. |
Solicit
additional equity investment in the Company by either issuing preferred
or
common stock.
|
4. |
Continue
to market Multiband services and acquire additional multi-dwelling
unit
customers.
|
5. |
Control
capital expenditures by contracting Multiband services and equipment
through a landlord-owned equipment
program.
|
6. |
Delivery
of video services to residents of single family homes. Effective
March 1,
2008 the Company purchased 51% of the outstanding stock of Michigan
Microtech, Inc. (MMT), formerly a wholly owned subsidiary of DTHC.
MMT
installs DirecTV video services in single family homes. Historically
MMT
has been profitable. The Company anticipates that by combining MMT
operations with Multiband operations that it will achieve a beneficial
impact to its consolidated cash flows and operating results. However,
there is no guarantee that these combined results will ultimately
be
favorable to the Company.
|
7. |
Expansion
of call center support via sales of call center services to both
existing
and future system operators and to buyers of the Company’s video
subscribers.
|
o |
our
capital expenditure objectives;
|
o |
our
debt service obligations; or
|
o |
our
working capital needs.
|
a)
|
An
annual meeting of Multiband shareholders was held on August 27, 2008.
There were present or present by proxy at the meeting 3,648,552 votes,
the
number necessary to hold a quorum.
|
b)
|
The
meeting resulted in the following votes related to the following
proxy
items:
|
Director
|
Number of votes
|
|||
Bell
|
3,457,552
|
|||
Bennett
|
3,455,602
|
|||
Dodge
|
3,457,552
|
|||
Harris
|
3,457,552
|
|||
Mandel
|
3,455,602
|
|||
Miller
|
3,457,552
|
|||
Schafer
|
3,457,602
|
Number of votes
|
||||
For
|
3,457,552
|
|||
Against
|
191,000
|
|||
Abstain
|
557
|
(a)
|
Exhibits
|
Certification
of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 of
the
Exchange Act.
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 of
the
Exchange Act.
|
32.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section
1350.
|
32.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section
1350.
|
MULTIBAND
CORPORATION
Registrant
|
||
Date:
November 14, 2008
|
By:
|
/s/
James L. Mandel
Chief
Executive Officer
|
Date:
November 14, 2008
|
By:
|
/s/
Steven M. Bell
Chief
Financial Officer
(Principal
Financial and Accounting
Officer)
|