UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K /A

(Amendment No. 1)

(Mark One)

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from_______to_______

 

Commission file number 001-33449

 

TOWERSTREAM CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

(State or other jurisdiction of incorporation or organization)

 

20-8259086

(I.R.S. Employer Identification No.)

 

 

 

88 Silva Lane

Middletown, Rhode Island

(Address of principal executive offices)

 

02842

(Zip Code)

 

Registrant’s telephone number, including area code (401) 848-5848

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

The NASDAQ Capital Market

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒  

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐  

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒    No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐ (Do not check if a smaller reporting company) 

Smaller reporting company ☐      

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common stock was last sold as of the last business day of the registrant’s most recently completed second fiscal quarter was $108,303,532.

 

As of March 14, 2016, there were 66,810,149 shares of common stock, par value $0.001 per share, outstanding.

 

 
 

 

 

EXPLANATORY NOTE

 

 

We are filing this Amendment No. 1 on Form 10-K/A to our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Our Form 10-K was originally filed with the Securities and Exchange Commission (the “SEC”) on March 18, 2016 (the “Original Filing”), for the sole purpose of including the information required by Part III. This information was permitted to have been incorporated by reference from our definitive proxy statement for our 2016 annual meeting of stockholders, if such proxy statement had been filed with the SEC within 120 days of our 2015 fiscal year-end.

   

As a result of this Amendment No. 1, we are also filing as exhibits the certifications required under Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002.

 

This Amendment No. 1 does not change any of the information contained in the Original Filing. Other than as specifically set forth herein, this Amendment No. 1 continues to speak as of the date of the Original Filing and we have not updated or amended the disclosures contained therein to reflect events that have occurred since the date of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with our filings made with the SEC subsequent to the date of the Original Filing.

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

 

Directors and Executive Officers

 

 

The following table sets forth the names, ages, and positions of the current directors and executive officers of Towerstream Corporation (“Towerstream”, “we”, “us”, “our” or the “Company”). Our directors hold office for one-year terms until the following annual meeting of stockholders and until his or her successor has been elected and qualified or until the director’s earlier resignation or removal. Officers are elected annually by the Board of Directors (the “Board”) and serve at the discretion of the Board.

 

Name

Age

Position

Philip Urso

56

Interim Chief Executive Officer* and Chairman of the Board of Directors

Arthur G. Giftakis

50

Chief Operating Officer

Joseph P. Hernon

56

Chief Financial Officer

Howard L. Haronian, M.D. (1)(2)(3)

54

Director

Paul Koehler (1)(3)

56

Director

William J. Bush (1)(2)

50

Director

     

(1) Member of our Audit Committee.

(2) Member of our Compensation Committee.

(3) Member of our Nominating Committee.

* Effective February 16, 2016 appointed interim officer, at which time independent director status ceased.

 

The biographies below include information related to service by the persons below to Towerstream Corporation and our subsidiaries, Towerstream I, Inc.and Hetnets Tower Corporation. On January 4, 2007, we merged with and into a wholly-owned Delaware subsidiary for the sole purpose of changing our state of incorporation to Delaware. On January 12, 2007, a wholly-owned subsidiary of ours completed a reverse merger with and into a private company, Towerstream Corporation, with Towerstream Corporation (the private company) being the surviving company and becoming a wholly-owned subsidiary of ours. Upon closing of the merger, we discontinued our former business and succeeded to the business of Towerstream Corporation as our sole line of business. At the same time, we also changed our name to Towerstream Corporation and our newly acquired subsidiary, Towerstream Corporation, changed its name to Towerstream I, Inc.

 

  Philip Urso co-founded Towerstream I, Inc. in December 1999. In February 2016, the Company appointed Mr. Urso interim chief executive officer. Prior to his appointment to interim chief executive officer, Mr. Urso had served as a director and chairman since inception and as chief executive officer from inception until November 2005. Since becoming a public entity in January 2007, Mr. Urso has been our chairman and a director. In 1995, Mr. Urso co-founded eFortress and served as its president through 1999. From 1983 until 1997, Mr. Urso owned and operated a group of radio stations. In addition, Mr. Urso co-founded the regional cell-tower company, MCF Communications, Inc. Mr. Urso was appointed to the Board due to his significant experience in the wireless broadband and tower industries, his familiarity with the Company, as well as his extensive business management expertise.

 

 
 

 

 

  Arthur G. Giftaki s has been our chief operating officer since February 2016. Prior to his appointment to chief operating officer, Mr. Giftakis served as the Company’s senior vice president of engineering and operations since January 2014. Prior to his position with the Company, Mr. Giftakis served as the director of sales engineering at Sockeye Networks and Navisite. In addition, Mr. Giftakis was the director of data communications at Bell Atlantic for ten years.

   

Joseph P. Hernon has been our chief financial officer, principal financial officer and principal accounting officer since joining Towerstream Corporation in May 2008. From November 2007 until May 2008, Mr. Hernon was a financial consultant to a high technology company. From November 2005 until October 2007, Mr. Hernon served as the chief financial officer of Aqua Bounty Technologies Inc., a biotechnology company dedicated to the improvement of productivity in the aquaculture industry. From August 1996 until October 2005, Mr. Hernon served as vice president, chief financial officer and secretary of Boston Life Sciences Inc., a biotechnology company focused on developing therapeutics and diagnostics for central nervous system diseases. From January 1987 until August 1996, Mr. Hernon held various positions while employed at PricewaterhouseCoopers LLP, an international accounting firm. Mr. Hernon is a certified public accountant and holds a B.S. degree in Business Administration from the University of Lowell, Massachusetts and a M.S. degree in Accounting from Bentley College in Waltham, MA.

 

Howard L. Haronian, M.D., has served as a director of Towerstream I, Inc. since inception in December 1999. Since becoming a public entity in January 2007, Dr. Haronian has been a director of the Company. Dr. Haronian is an interventional cardiologist and has been president of Cardiology Specialists, Ltd. of Rhode Island since 1994. Dr. Haronian has served on the clinical faculty of the Yale School of Medicine since 1994. Dr. Haronian graduated from the Yale School of Management Program for Physicians in 1999. Dr. Haronian has directed the Cardiac Catheterization program at The Westerly Hospital since founding the program in 2003. Dr. Haronian was appointed to the Board due to his extensive knowledge of the Company’s operations since its founding and his executive level experience at other organizations.

 

Paul Koehler has been a director of the Company since January 2007. Mr. Koehler has over 25 years of business experience in ethanol and renewable electricity industries. At Pacific Ethanol, Mr. Koehler has led the grain and co-product division since 2011 and corporate development since joining the company in 2005. Prior to joining Pacific Ethanol, he served as Director of Business Development for PPM Energy, Inc., leading PPM's efforts to develop and acquire several wind power projects. Mr. Koehler was also a co-founder of ReEnergy, one of the companies acquired by Pacific Ethanol. Paul also has worked for Portland General Electric and Enron in electricity trading, marketing, and commodity risk management. Mr. Koehler has a BA from the Honors College at the University of Oregon.

 

William J. Bush has been a director of the Company since January 2007. Since January 2010, Mr. Bush has served as the chief financial officer of Borrego Solar Systems, Inc., which is one of the nation’s leading financiers, designers and installers of commercial and government grid-connected solar electric power systems. From October 2008 to December 2009, Mr. Bush served as the chief financial officer of Solar Semiconductor, Ltd., a private vertically integrated manufacturer and distributor of quality photovoltaic modules and systems targeted for use in industrial, commercial and residential applications with operations in India helping it reach $100 million in sales in its first 15 months of operation. Prior to that, Mr. Bush served as chief financial officer and corporate controller for a number of high growth software and online media companies as well as being one of the founding members of Buzzsaw.com, Inc., a spinoff of Autodesk, Inc. Prior to his work at Buzzsaw.com, Mr. Bush served as corporate controller for Autodesk, Inc. (NasdaqGM: ADSK), the fourth largest software applications company in the world. His prior experience includes seven years in public accounting with Ernst & Young, and PricewaterhouseCoopers. Mr. Bush holds a B.S. degree in Business Administration from U.C. Berkeley and is a certified public accountant. Mr. Bush was appointed to the Board because he has significant experience in finance.

 

Advisory Board

 

In January 2016, the Company appointed Ernest Ortega to its Board of Advisors. Mr. Ortega is the current Senior Vice President of Sales North America at Colt Technology Services, responsible for all North American sales initiatives. He was previously Chief Revenue Officer at Cogent Communications and prior to that served as Executive Vice President of Sales and Marketing at XO Communications.

 

Board Leadership Structure and Risk Oversight

 

Our Audit Committee is primarily responsible for overseeing our risk management processes on behalf of our Board. The Audit Committee receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our Company’s assessment of risks. In addition, the Audit Committee reports regularly to the full Board which also considers our risk profile. The Audit Committee and the full Board focus on the most significant risks facing our Company and our Company’s general risk management strategy, and also ensure that risks undertaken by our Company are consistent with the Board’s tolerance for risk. While the Board oversees our Company’s risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach to address the risks facing our Company.

 

 
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Directorships

 

       Except as otherwise reported above, none of our directors held directorships in other reporting companies or registered investment companies at any time during the past five years.

 

Family Relationships

 

Except for Howard L. Haronian, M.D. and Philip Urso, who are cousins, there are no family relationships among our directors or executive officers.

 

Involvement in Certain Legal Proceedings

 

To our knowledge, during the last ten years, none of our directors and executive officers (including those of our subsidiaries) has:

 

  

Had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.

 

  

Been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses.

 

  

Been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.

 

  

Been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission (the “SEC”), or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

 

  

Been the subject to, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.  

 

There are no material proceedings to which any director, officer or affiliate, any owner of record or beneficially of more than five percent of any class of our voting securities, or any associate of any such director, officer, affiliate, or security holder is a party adverse to us or has a material interest adverse to the Company.

 

Board Committees

 

Since January 2007, the standing committees of our Board consist of an Audit Committee, a Compensation Committee and a Nominating Committee. Each member of our committees is “independent” as such term is defined under and required by the federal securities laws and the rules of the NASDAQ Stock Market. The charters of each of the committees have been approved by our Board and are available on our website at www.towerstream.com .

 

Audit Committee

 

The Audit Committee is comprised of three directors: William J. Bush, Howard L. Haronian, M.D., and Paul Koehler. Mr. Bush is the Chairman of the Audit Committee. The Audit Committee’s duties include recommending to our Board the engagement of independent auditors to audit our financial statements and to review our accounting and auditing principles. The Audit Committee reviews the scope, timing and fees for the annual audit and the results of audit examinations performed by independent public accountants, including their recommendations to improve our system of accounting and our internal control over financial reporting. The Audit Committee oversees the independent auditors, including their independence and objectivity. However, the committee members are not acting as professional accountants or auditors, and their functions are not intended to duplicate or substitute for the activities of management and the independent auditors. The Audit Committee is empowered to retain independent legal counsel and other advisors as it deems necessary or appropriate to assist the Audit Committee in fulfilling its responsibilities, and to approve the fees and other retention terms of the advisors. Each of our Audit Committee members possesses an understanding of financial statements and generally accepted accounting principles. The Board has determined that Mr. Bush is an “audit committee financial expert” as defined in Item 407(d) (5) (ii) of Regulation S-K. The designation of Mr. Bush as an “audit committee financial expert” will not impose on him any duties, obligations or liability that are greater than those that are generally imposed on him as a member of our Audit Committee and Board, and his designation as an “audit committee financial expert” will not affect the duties, obligations or liability of any other member of our Audit Committee or Board.

 

 
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Compensation Committee

 

The Compensation Committee is comprised of two directors: Howard L. Haronian, M.D., and William J. Bush. Dr. Haronian is the Chairman of the Compensation Committee. The Compensation Committee has certain duties and powers as described in its charter, including but not limited to periodically reviewing and approving our salary and benefits policies, compensation of executive officers, administering our stock option plans and recommending and approving grants of stock options under such plans.

 

Compensation Committee Interlocks and Insider Participation

 

None of the members of our Compensation Committee is an officer or employee of our Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our Board or Compensation Committee.

 

Nominating Committee

 

The Nominating Committee is comprised of two directors: Howard L. Haronian, M.D., and Paul Koehler. Dr. Haronian is Chairman of the Nominating Committee. The Nominating Committee considers and makes recommendations on matters related to the practices, policies and procedures of the Board and takes a leadership role in shaping our corporate governance. As part of its duties, the Nominating Committee assesses the size, structure and composition of the Board and its committees, and coordinates the evaluation of Board performance. The Nominating Committee also acts as a screening and nominating committee for candidates considered for election to the Board.

 

Changes in Nominating Process

 

There are no material changes to the procedures by which security holders may recommend nominees to our Board.

 

Compensation of Directors

 

In October 2015, Philip Urso, the Chairman of the Board of Directors, expanded his day to day involvement in the Company’s activities to assess the daily operation of the Company and advise the monthly Board on cost cutting measures and other strategies. As compensation for these expanded services, the Company determined to provide Mr. Urso with annual compensation, effective October 2015, of $10,166.67 cash, a monthly car allowance no greater than $1,000 per month and healthcare coverage.

 

         Mr. Urso was appointed Interim Chief Executive Officer on February 16, 2016 and on March 4, 2016, the Company further modified the terms of Mr. Urso’s compensation as follows:

 

 

Mr. Urso’s cash compensation was increased to $25,000 per month;

     

 

The Company awarded Mr. Urso a one-time grant of 100,000 fully vested, ten-year options to purchase shares of the Company’s common stock, at an exercise price equal to the price of the Company’s common stock at market close on March 4, 2016;and

     

 

The Company will award Mr. Urso 25,000 fully-vested, ten-year stock options on the last day of each month of his service as Interim Chief Executive Officer for an initial period of four months, and 10,000 shares per month thereafter due on the last day of each month of service as Interim Chief Executive Officer, with all such options having an exercise price equal to the price of the Company’s common stock at market close on the day of the grant.

 

Effective April 2016, subject to shareholder approval, the Board of Directors approved amendments to the 2008 Non-Employee Directors Compensation Plan. Under the revised plan, each non-employee director is to receive a monthly $2,083.33 cash fee. Commitee chairman will receive an additional $416.66 cash fee monthly. Each non-employee director shall also receive quarterly grants of ten-year options to purchase 30,000 shares of our common stock at an exercise price equal to the fair market value of our common stock on the date of grant and that vest monthly over a one year period. 

 

The following table summarizes the compensation awarded during the fiscal year ended December 31, 2015 to our directors who are not named executive officers in the summary compensation table below:

 

Name

 

Fees Earned or
Paid in Cash

   

Option

Awards (1)(2)

   

Total

 

Philip Urso

  $ 75,500       $ 47,733       $ 123,233    

Howard L. Haronian, M.D.

  $ 55,000       $ 47,733       $ 102,733    

Paul Koehler

  $ 50,000       $ 47,733       $ 97,733    

William J. Bush

  $ 55,000       $ 47,733       $ 102,733    

 

 

 

(1)

Based upon the aggregate grant date fair value calculated in accordance with the Stock Compensation Topic of the Financial Accounting Standards Board Accounting Standards Codification. Our policy and assumptions made in the valuation of share-based payments are contained in Note 12 to our December 31, 2015 financial statements included in the Original Filing.

 

 

(2)

Option awards relate to the issuance in 2015 of options to purchase 50,000 shares at an exercise price of $2.07 each for Messrs. Urso, Koehler and Bush, and Dr. Haronian.

   

 
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Pursuant to the 2008 Non-Employee Directors Compensation Plan in effect in 2015, each non-employee director was entitled to receive periodic grants of ten-year options to purchase 50,000 shares of our common stock at an exercise price equal to the fair market value of our common stock on the date of grant and that vests monthly over a one year period. An initial grant was made upon such non-employee director’s election or appointment to our Board and thereafter annually on the first business day in June, subject to such director remaining on the Board. Non-employee directors also receive $50,000 per annum in cash. In connection with the additional responsibilities associated with such positions, the Chairman of the Board was entitled to receive an additional $10,000 per year, and the Chairman of the Audit and Compensation Committees were each entitled to receive an additional $5,000 per year.

 

Section 16(a) Beneficial Ownership Reporting Compliance  

 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities, to file reports of ownership and changes in ownership with the SEC. Based solely on our review of copies of such reports and representations from our executive officers and directors, we believe that our executive officers and directors complied with all Section 16(a) filing requirements during the year ended December 31, 2015.

 

Code of Ethics and Business Conduct

 

Our Board has adopted a code of ethics and business conduct that establishes the standards of ethical conduct applicable to all directors, officers and employees of Towerstream Corporation. The code of ethics and business conduct addresses, among other things, conflicts of interest, compliance with disclosure controls and procedures, and internal control over financial reporting, corporate opportunities and confidentiality requirements. The Audit Committee is responsible for applying and interpreting our code of ethics and business conduct in situations where questions are presented to it. There were no amendments or waivers to the code of ethics and business conduct in fiscal 2015. Our code of ethics and business conduct is available for review on our website at www.towerstream.com . We will provide a copy of our code of ethics and business conduct free of charge to any person who requests a copy. Requests should be directed by e-mail to Joseph P. Hernon, our Chief Financial Officer, at jhernon@towerstream.com, or by mail to Towerstream Corporation, 88 Silva Lane, Middletown, Rhode Island 02842, or by telephone at (401) 848-5848.

 

Item 11. Executive Compensation.

 

Compensation Committee Report

 

Under the rules of the Securities and Exchange Commission (“SEC”), this Compensation Committee Report is not deemed to be incorporated by reference by any general statement incorporating this Annual Report by reference into any filings with the SEC.

 

The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis with management. Based on this review and these discussions, the Compensation Committee recommended to the Board of Directors that the following Compensation Discussion and Analysis be included in this proxy statement.

 

Submitted by the Compensation Committee
Howard L. Haronian, M.D., Chairman

William J. Bush

 

Compensation Discussion and Analysis

 

  The following discussion and analysis of compensation arrangements of our named executive officers for 201 5 should be read together with the compensation tables and related disclosures set forth below.

 

We believe our success depends on the continued contributions of our named executive officers. Personal relationships and experience are very important in our industry. Our named executive officers are primarily responsible for many of our critical business development relationships. The maintenance of these relationships is critical to ensuring our future success as is experience in managing these relationships. Therefore, it is important to our success that we retain the services of these individuals and prevent them from competing with us should their employment with us terminate.

 

 
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General Philosophy

 

Our overall compensation philosophy is to provide an executive compensation package that enables us to attract, retain and motivate executive officers to achieve our short-term and long-term business goals. The goals of our compensation program are to align remuneration with business objectives and performance, and to enable us to retain and competitively reward executive officers who contribute to the long-term success of the Company. We attempt to pay our executive officers competitively in order that we will be able to retain the most capable people in the industry. In making executive compensation and other employment compensation decisions, the Compensation Committee considers achievement of certain criteria, some of which relate to our performance and others of which relate to the performance of the individual employee. Awards to executive officers are based on achievement of Company and individual performance criteria.

  

The Compensation Committee will evaluate our compensation policies on an ongoing basis to determine whether they enable us to attract, retain and motivate key personnel. To meet these objectives, the Compensation Committee may from time to time increase salaries, award additional stock grants or provide other short and long-term incentive compensation to executive officers and other employees.

 

Compensation Program & Forms of Compensation

 

We provide our executive officers with a compensation package consisting of base salary, bonus, equity incentives and participation in benefit plans generally available to other employees. In setting total compensation, the Compensation Committee considers individual and company performance, as well as market information regarding compensation paid by other companies in our industry.

 

Base Salary. Salaries for our executive officers are initially set based on negotiation with individual executive officers at the time of recruitment and with reference to salaries for comparable positions in the industry for individuals of similar education and background to the executive officers being recruited. We also consider the individual’s experience, reputation in the industry and expected contributions to the Company. Base salary is continuously evaluated by competitive pay and individual job performance. In each case, we take into account the results achieved by the executive, their future potential, scope of responsibilities and experience, and competitive salary practices. At times, our executive officers have elected to take less than market salaries.  These salaries were subject to increases to base salary that is comparable with his role and responsibilities when compared to companies of comparable size in similar locations.

 

Bonuses. We design our bonus programs to be both affordable and competitive in relation to the market. Our bonus program is designed to motivate employees to achieve overall goals. Our programs are designed to avoid entitlements, to align actual payouts with the actual results achieved and to be easy to understand and administer. The Compensation Committee and the executive officer work together to establish targets and goals for the executive officer. Upon completion of the fiscal year, the Compensation Committee assesses the executive officer’s performance and, with input from management, determines the achievement of the bonus targets and the amount to be awarded within the parameters of the executive officer’s agreement with us.

 

Equity-Based Rewards

 

We design our equity programs to be both affordable and competitive in relation to the market. We monitor the market and applicable accounting, corporate, securities and tax laws and regulations, and adjust our equity programs as needed. Stock options and other forms of equity compensation are designed to reflect and reward a high level of sustained individual performance over time. We design our equity programs to align employees’ interests with those of our stockholders.

 

Timing of Equity Awards

 

The Board has authorized the Compensation Committee to approve stock option grants to our executive officers. Stock options are generally granted at scheduled meetings of the Compensation Committee. The exercise price of a newly granted option is the closing price of our common stock on the date of grant.

 

Benefits Programs

 

We design our benefits programs to be both affordable and competitive in relation to the market while conforming with local laws and practices. We monitor the market, local laws and practices and adjust our benefits programs as needed. We design our benefits programs to provide an element of core benefits, and to the extent possible, offer options for additional benefits, and balance costs and cost sharing between us and our employees.

 

 
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Tax and Accounting Considerations

 

In the review and establishment of our compensation programs, we consider the anticipated accounting and tax implications to us and our executives.

 

Section 162(m) of the Internal Revenue Code imposes a limit on the amount of compensation that we may deduct in any one year with respect to our chief executive officer and each of our next four most highly compensated executive officers, unless certain specific and detailed criteria are satisfied. Performance-based compensation, as defined in the Internal Revenue Code, is fully deductible if the programs are approved by stockholders and meet other requirements. We believe that grants of equity awards under our incentive-based equity option plans may qualify as performance-based for purposes of satisfying the conditions of Section 162(m), thereby permitting us to receive a federal income tax deduction, if applicable, in connection with such awards. In general, we have determined that we will not seek to limit executive compensation so that it is deductible under Section 162(m). However, from time to time, we monitor whether it might be in our interests to structure our compensation programs to satisfy the requirements of Section 162(m). We seek to maintain flexibility in compensating our executives in a manner designed to promote our corporate goals and therefore our Compensation Committee has not adopted a policy requiring all compensation to be deductible. Our Compensation Committee will continue to assess the impact of Section 162(m) on our compensation practices and determine what further action, if any, is appropriate.

 

Role of Executives in Executive Compensation Decisions

 

The Board and our Compensation Committee generally seek input from our executive officers when discussing the performance of, and compensation levels for, executives. The Compensation Committee also works with our Chief Executive Officer and our Chief Financial Officer to evaluate the financial, accounting, tax and retention implications of our various compensation programs. None of our executives participates in deliberations relating to their compensation.

 

201 5 Bonus Payments

 

In October 2015, Mr. Thompson received a $75,000 bonus upon the execution of the third amendment to his employment agreement.

 

See “Employment Agreements and Change-in-Control Agreements” below for a discussion of our employment agreement with Mr. Thompson and our employment arrangement with Mr. Hernon.

   

201 6 Bonus Criteria

 

The Compensation Committee is presently evaluating the structure of the bonus program for 2016. We intend that the bonus program will be both affordable and competitive in relation to the market and be designed to motivate employees to achieve overall corporate goals. The program shall be structured to avoid entitlements, to align actual payouts with the actual results achieved and to be easy to understand and administer.  

 

Compensation Risk Management

 

We have considered the risk associated with our compensation policies and practices for all employees, and we believe we have designed our compensation policies and practices in a manner that does not create incentives that could lead to excessive risk taking that would have a material adverse effect on us.

 

The Role of Stockholder Say-on-Pay Votes

 

The Company provides its stockholders with the opportunity to cast an advisory vote on executive compensation (a “say-on-pay proposal”). The Compensation Committee will consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.

 

 
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Summary Compensation Table

 

The following table summarizes the annual and long-term compensation paid to our chief executive officer and our other most highly compensated executive officer who were serving at the end of 2015, whom we refer to collectively in this Annual Report on Form 10-K/A as the “named executive officers”. Mr. Thompson resigned from all positions with the Company in February 2016 and the Company appointed Philip Urso as his successor and Arthur Giftakis as Chief Operating Officer. During 2016, such persons became named executive officers of the Company. In addition, the Company adopted new compensation policies applicable to named executive officers under which Mr. Urso and Mr. Giftakis will receive lesser cash compensation amounts than previously paid plus equity incentives, as reported in our Current Report on Form 8-K dated March 4, 2016, intended to align the interests of such executives with the interests of stockholders. Such policies reduced the obligation of the Company for payment of historical levels of cash compensation to executives, which the Company had been contractually obligated to pay pursuant to its employment agreements with executives.

   

Name and Principal Position

Year

 

Salary

   

Bonus

   

Option

Awards(1)

   

Total

 

Jeffrey M. Thompson

2015

  $ 475,000     $ 75,000     $ 79,373 (2)   $ 629,373  

President and Chief Executive Officer*

2014

  $ 373,277     $ 240,800     $ 79,992 (3)   $ 694,069  
 

2013

  $ 330,000     $ 297,500     $ 73,209 (4)   $ 700,709  
                                   

Joseph P. Hernon

2015

  $ 325,000     $ -     $ 54,913 (5)   $ 379,913  

Chief Financial Officer

2014

  $ 279,569     $ 108,125     $ 48,945 (6)   $ 436,639  
 

2013

  $ 250,000     $ 170,000     $ 115,570 (7)   $ 535,570  

*

Resigned from all positions with the Company in February 2016.  All options issued to Jeffrey Thompson referenced below vested February 2016 in connection with the separation agreement between Mr. Thompson and the Company.

 

 

(1) 

Based upon the aggregate grant date fair value calculated in accordance with the Stock Compensation Topic of the Financial Accounting Standards Board Accounting Standards Codification. Our policy and assumptions made in the valuation of share-based payments are contained in Note 12 to our December 31, 2015 financial statements.

 

 

(2)

On July 30, 2015, Mr. Thompson received a ten-year option to purchase 54,166 shares of common stock at an exercise price of $1.55 per share in recognition of services performed during 2015. These options vest quarterly over a year period with the first tranche vesting on October 30, 2015 .

 

On September 11, 2015, Mr. Thompson received a ten-year option to purchase 5 0,000 shares of common stock at an exercise price of $1.31 per share in recognition of services performed during 2015. These options vest one half immediately and the remaining half on a quarterly basis over a year period with the first tranche vesting on December 11, 2015 .

 

On November 23, 2015, Mr. Thompson received a ten-year option to purchase 33,334 shares of common stock at an exercise price of $0.46 per share in recognition of services performed during 2015. These options vest quarterly over a year period with the first tranche vesting on February 23, 2016 .

 

  

(3)

On July 22, 2014, Mr. Thompson received a ten-year option to purchase 31,267 shares of common stock at an exercise price of $1.67 per share in recognition of services performed during 2014. These options vest monthly over a two year period with the first tranche vesting on August 22, 2014.

 

On September 26, 2014, Mr. Thompson received a ten-year option to purchase 75,000 shares of common stock at an exercise price of $1.34 per share in recognition of services performed during 2014. These options vest quarterly over a two year period with the first tranche vesting on December 26, 2014.

 

  

(4)

On February 25, 2013, Mr. Thompson received a ten-year option to purchase 50,000 shares of common stock at an exercise price of $2.62 per share in recognition of services performed during 2013. These options were fully vested and exercisable upon issuance.

   

 

(5)

On July 30, 2015, Mr. Hernon received a ten-year option to purchase 27,084 shares of common stock at an exercise price of $1.55 per share in recognition of services performed during 2015. These options vest quarterly over a year period with the first tranche vesting on October 30, 2015 .

 

On September 11, 2015, Mr. Hernon received a ten-year option to purchase 5 0,000 shares of common stock at an exercise price of $1.31 per share in recognition of services performed during 2015. These options vest one half immediately and the remaining half on a quarterly basis over a year period with the first tranche vesting on December 11, 2015 .

 

On November 23, 2015, Mr. Hernon received a ten-year option to purchase 16,667 shares of common stock at an exercise price of $0.46 per share in recognition of services performed during 2015. These options vest quarterly over a year period with the first tranche vesting on February 23, 2016 .

   

 
8

 

 

 

(6)

On July 22, 2014, Mr. Hernon received a ten-year option to purchase 15,806 shares of common stock at an exercise price of $1.67 per share in recognition of services performed during 2014. These options vest monthly over a two year period with the first tranche vesting on August 22, 2014.

 

On September 26, 2014, Mr. Hernon received a ten-year option to purchase 50,000 shares of common stock at an exercise price of $1.34 per share in recognition of services performed during 2014. These options vest quarterly over a two year period with the first tranche vesting on December 26, 2014.

 

   

(7)

On February 25, 2013, Mr. Hernon received a ten-year option to purchase 25,000 shares of common stock at an exercise price of $2.62 per share in recognition of services performed during 2013. These options were fully vested and exercisable upon issuance.

 

On June 3, 2013, Mr. Hernon received a ten-year option to purchase 50,000 shares of common stock at an exercise price of $2.56 per share in recognition of services performed during 2013. These options vest annually over a five year period with the first tranche vesting on June 3, 2014.

 

Grants of Plan-Based Awards

 

The following table summarizes the stock option awards granted to our named executive officers during the year ended December 31, 2015:

 

Name

 

Grant Date

 

All Other Option

Awards: Number

of Securities

Underlying Options

   

Exercise or Base

Price of Option

Awards ($/Share)(1)

   

Grant Date
Fair Value
of Stock
and Option
Awards($)(2)

 

Jeffrey M. Thompson

 

7/30/15

    54,166     $ 1.55     $ 39,935  
   

9/11/15

    50,000     $ 1.31     $ 30,452  
   

11/23/15

    33,334     $ 0.46     $ 8,986  
                             

Joseph P. Hernon

 

7/30/15

    27,084     $ 1.55     $ 19,968  
   

9/11/15

    50,000     $ 1.31     $ 30,452  
   

11/23/15

    16,667     $ 0.46     $ 4,493  

      

 

(1)

The exercise price of the stock options awarded was determined in accordance with the stock option plans, which provides that the exercise price for an option granted be the closing sale price for our common stock as quoted on the NASDAQ Capital Market on the date of grant.

 

 

(2)

Based upon the aggregate grant date fair value calculated in accordance with the Stock Compensation Topic of the Financial Accounting Standards Board Accounting Standards Codification. Our policy and assumptions made in the valuation of share-based payments are contained in Note 12 to our December 31, 2015 financial statements.

 

There were no restricted stock awards granted to our named executive officers during the year ended December 31, 2015 .

 

 
9

 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table summarizes the outstanding equity awards to our named executive officers as of December 31, 2015. All options issued to Jeffrey Thompson referenced below vested February 2016 in connection with the separation agreement between Mr. Thompson and the Company.

 

   

Option Awards

                           

Name

 

Number of

Securities

Underlying

Unexercised

Options

Exercisable

   

Number of

Securities

Underlying

Unexercised

Options

Unexercisable

   

Option Exercise

Price

 

Option

Expiration Date

Jeffrey M. Thompson

    12,010           $ 2.00  

12/2/17

      11,032           $ 2.00  

3/2/18

      100,000           $ 4.94  

6/23/21

      44,000       88,000 (1)   $ 5.25  

7/6/21

      118,750       37,500 (2)   $ 5.25  

7/6/21

      50,000           $ 2.62  

2/24/23

      22,151       9,116 (3)   $ 1.67  

7/21/24

      46,875       28,125 (4)   $ 1.34  

9/25/24

      13,542       40,625 (5)   $ 1.55  

7/29/25

      31,250       18,750 (6)   $ 1.31  

9/10/25

      -       33,334 (7)   $ 0.46  

11/22/25

                           

Joseph P. Hernon

    103,426           $ 1.45  

6/1/18

      60,000           $ 4.94  

6/23/21

      23,335       64,666 (8)   $ 5.25  

7/6/21

      57,504       18,747 (9)   $ 5.25  

7/6/21

      25,000           $ 2.62  

2/24/23

      20,000       30,000 (10)   $ 2.56  

6/2/23

      11,200       4,606 (3)   $ 1.67  

7/21/24

      31,250       18,750 (4)   $ 1.34  

9/25/24

      6,771       20,313 (5)   $ 1.55  

7/29/25

      31,250       18,750 (6)   $ 1.31  

9/10/25

      -       16,667 (7)   $ 0.46  

11/22/25

 

 

(1)

88,000 of the options were granted in four tranches of 22,000.  Each tranche will begin to vest in sequential order only when and if the Company completes four (4) acquisitions prior to the expiration date.  Each tranche will vest in quarterly installments over a two year period once each respective acquisition is closed.  

 

 

(2)

The options unexercisable began vesting upon the previous execution of backhaul contracts of which (i) 6,250 of the options will vest in quarterly installments of 3,125 and become fully vested in April 2016, (ii) 9 ,375 of the options will vest in quarterly installments of 3,125 and become fully vested in August 2016 and (iii) 21,875 of the options will vest in quarterly installments of 3,125 and become fully vested in July 2017.

   

  

(3)

Such option vests monthly over a two year period, with the first tranche vesting on August 22, 2014.

 

 

(4)

Such option vests quarterly over a two year period, with the first tranche vesting on December 26, 2014.

 

 

(5)

Such option vests quarterly over a year period with the first tranche vesting on October 30, 2015.

 

 

(6)

Such option vests one half immediately and the remaining half on a quarterly basis over a year period with the first tranche vesting on December 11, 2015.

 

 

(7)

These options vest quarterly over a year period with the first tranche vesting on February 23, 2016.

   

 
10

 

 

 

(8)

64,000 of the options were granted in four tranches of 16,000.  Each tranche will begin to vest in sequential order only when and if the Company completes four (4) acquisitions prior to the expiration date.  Each tranche will vest as to one-third on the one year anniversary of the completed acquisition with the remaining two-thirds vesting ratably on a quarterly basis over the following two years once each respective acquisition is closed.  The remaining 666 will become vested in February 2016.

 

 

(9)

The options unexercisable began vesting upon the previous execution of backhaul contracts of which (i) 3,124 of the options will vest in quarterly installments of 1,562 and become fully vested in April 2016, (ii) 4,686 of the options will vest in quarterly installments of 1,562 and become fully vested in August 2016 and (iii) 10,937 of the options will vest in quarterly installments of 1,562 and become fully vested in July 2017.

 

 

(10)

Such option vests as to one-fifth of the shares subject to the option annually, commencing June 3, 2014.

 

  Option Exercises and Stock Vested

 

The following table summarizes, with respect to our named executive officers, all options that were exercised and restricted stock vested during fiscal 2015: 

 

   

Option Awards

   

Restricted Stock

 

Name

 

Number of

Shares

Acquired on

Exercise(#)

   

Value Realized

on Exercise ($)

   

Number of

Shares

Vested (#)

   

Value Realized

on Vesting ($)

 

Jeffrey M. Thompson

    175,193     $ 357,394       -       -  

 

In December 2007, we entered into an employment agreement, as amended through 2015, with Jeffrey M. Thompson, our principal executive officer, which was terminated in February 2016.

 

We entered into a separation agreement with Mr. Thompson on February 12, 2016 pursuant to which Mr. Thompson resigned from all positions with the Company and its subsidiaries, and as a member of the Board of Directors. Among other terms and conditions, the separation agreement provides for (i) the mutual release of claims, liabilities and causes of action by Mr. Thompson and the Company, (ii) payment of $277,083, an amount approximately equal to the remaining term of Mr. Thompson's employment agreement which was to expire in October 2016, (iii) vesting of option and other stock incentive awards held by Mr. Thompson and (iv) a three month non-competition period and a 12 month non solicitation period. The separation agreement became effective eight days following its execution.

 

      In May 2008, Joseph P. Hernon joined the Company as Chief Financial Officer. His employment offer provided for a base annual salary of $190,000 and bonus payments up to 58% of base salary, as determined by the Board. Mr. Hernon’s annual base salary has been increased at times, most recently to (i) $250,000 effective April 1, 2012, (ii) $275,000 effective February 5, 2014, and (iii) $325,000 effective November 18, 2014. Upon joining the Company, Mr. Hernon was granted options to purchase 150,000 shares of common stock at an exercise price of $1.45 per share, vesting in three annual installments commencing upon the first anniversary of the grant. He has received subsequent awards and is eligible to receive additional stock-based awards at the discretion of the Board and as provided under the Company’s stock-based incentive plans. The Company pays 100% of Mr. Hernon’s health insurance. He is also eligible to participate in the Company’s health and other employee benefit plans. Mr. Hernon is an employee at will.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

The following table sets forth information with respect to the beneficial ownership of our common stock as of April 28, 2016 by:

 

 

 each person known by us to beneficially own more than 5% of our common stock (based solely on our review of SEC filings);

 

 each of our directors;

 

 each of our named executive officers listed in the section entitled “Summary Compensation Table” under Executive Compensation; and

 

 all of our directors and executive officers as a group.

 

The percentages of common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of the security, or investment power, which includes the power to dispose of or to direct the disposition of, with respect to the security. Except as indicated in the footnotes to this table, each beneficial owner named in the table below has sole voting and sole investment power with respect to all shares beneficially owned and each person’s address is c/o Towerstream Corporation, 88 Silva Lane, Middletown, Rhode Island 02842, unless otherwise indicated. As of April 28, 2016, there were 66,910,149 shares of our common stock outstanding.

 

 
11

 

 

  

Name and Address of Beneficial Owner

 

Amount and Nature

of Beneficial Ownership(1)

   

Percent of

Class (1)

 

5% Stockholders:

               

Melody Capital Partners, LP (2)

717 Fifth Avenue, 12th Floor

New York, NY 10022

    3,600,000 (3)     5.1

%

                 

Steven D. Lebowitz (4)

439 N. Bedford Drive

Beverly Hills, CA 90210

    5,856,338       8.8

%

                 

Deborah P. Lebowitz (5)

439 N. Bedford Drive

Beverly Hills, CA 90210

    5,456,338       8.2

%

                 

FMR LLC (6)

245 Summer Street

Boston, MA 02210

    8,216,250       12.3

%

                 

Directors and Named Executive Officers:

               

Philip Urso

    1,754,268 (7)     2.6

%

William J. Bush

    352,781 (8)     *  

Howard L. Haronian, M.D.

    1,409,235 (9)     2.1

%

Paul Koehler

    325,673 (10)     *  

Joseph P. Hernon

    525,555 (11)     *  

Arthur G. Giftakis

    251,308 (12)     *  

Jeffrey Thompson

    2,309,124 (13)     3.5

%

All directors and executive officers as a group (7 persons)

    6,927,944       9.9

%

      (7)(8)(9)(10)(11)(12)(13)          

 

* Less than 1%.

    

(1)

Shares of common stock beneficially owned and the respective percentages of beneficial ownership of common stock assumes the exercise of all options, warrants and other securities convertible into common stock beneficially owned by such person or entity currently exercisable or exercisable within 60 days of April 28, 2016. Shares issuable pursuant to the exercise of stock options and warrants exercisable within 60 days are deemed outstanding and held by the holder of such options or warrants for computing the percentage of outstanding common stock beneficially owned by such person, but are not deemed outstanding for computing the percentage of outstanding common stock beneficially owned by any other person.

 

(2)

Based on a Schedule 13G filed with the SEC on October 27, 2014 and information provided by Melody Capital Partners LP (“Melody”). Melody, as the investment manager of Melody Special Situations Offshore Credit Mini-Master Fund, L.P. (“Special Situations”), Melody Capital Partners Offshore Credit Mini-Master Fund, L.P. (“Capital Partners Offshore”), Melody Capital Partners Onshore Credit Fund, L.P. (“Capital Partners Onshore”) and Melody Capital Partners FDB Fund (“Capital Partners FDB”) has the shared power to vote and dispose of the securities of the Company held by each such fund. Melody Capital Advisors, LLC, as the general partner of Melody, has the shared power to vote and dispose of securities of the Company beneficially held by Melody.

 

(3)

Based on a Schedule 13G filed with the SEC on October 27, 2014 and information provided by Melody. Represents (i) 602,077 shares of common stock underlying warrants with an exercise price of $0.01 per share (the “A Warrants”) held by Special Situations and 1,204,154 shares of common stock underlying warrants with an exercise price of $1.26 per share (the “B Warrants”) held by Special Situations, (ii) 227,188 shares of common stock underlying A Warrants held by Capital Partners Offshore and 454,375 shares of common stock underlying B Warrants held by Capital Partners Offshore, (iii) 224,708 shares of common stock underlying A Warrants held by Capital Partners Onshore and 449,416 shares of common stock underlying B Warrants held by Capital Partners Onshore, and (iv) 146,027 shares of common stock underlying A Warrants held by Capital Partners FDB and 292,055 shares of common stock underlying B Warrants held by Capital Partners FDB.

      

 
12

 

 

(4)

Based on a Schedule 13G filed by the reporting person on February 16, 2016. Includes 400,000 shares of common stock beneficially owned by The Lebowitz Family, LLC, a trust over which Mr. Lebowitz serves as a co-trustee and has sole voting and sole dispositive power. Includes 5,456,338 shares of common stock over which Mr. Lebowitz has shared voting and dispositive power, including shares beneficially owned by (a) Deborah P. Lebowitz, (b) The Steven & Deborah Lebowitz Foundation and (c) the Lebowitz Family Trust — 1986, dated October 7, 1986, as amended, a revocable living trust over which Mr. Lebowitz serves as a co-trustee and has shared voting and shared dispositive power.

 

(5)

Based on a Schedule 13G filed by the reporting person on February 16, 2016. Includes 5,456,338 shares of common stock beneficially owned by (a) The Steven & Deborah Lebowitz Foundation and (b) the Lebowitz Family Trust — 1986, dated October 7, 1986, as amended, a revocable living trust over which Mr. Lebowitz serves as a co-trustee and has shared voting and shared dispositive power.

  

  

(6)

Based on information provided by a representative from FMR LLC.

  

(7)

Includes 375,625 shares of common stock issuable upon the exercise of options that are currently exercisable or exercisable within 60 days. Excludes 103,886 shares of common stock held in a trust for the benefit of Mr. Urso’s minor children, of which Mr. Urso is not a trustee. Mr. Urso disclaims beneficial ownership of the 103,886 shares held in trust.

 

(8)

Includes 312,500 shares of common stock issuable upon the exercise of options that are currently exercisable or exercisable within 60 days. The remaining 40,281 shares are held in trust for the benefit of the Bush family.  Mr. Bush is a trustee of this trust and disclaims beneficial ownership of such 40,281 shares.

 

(9)

Includes 10,000 shares of common stock held by Dr. Haronian’s wife, for which Dr. Haronian has an indirect interest in, and 325,039 shares of common stock issuable upon the exercise of options that are currently exercisable or exercisable within 60 days.

 

(10)

Includes 310,000 shares of common stock issuable upon the exercise of options that are currently exercisable or exercisable within 60 days.

  

(11)

Includes 440,599 shares of common stock issuable upon the exercise of options that are currently exercisable or exercisable within 60 days.

 

(12)

Includes 250,308 shares of common stock issuable upon the exercise of options that are currently exercisable or exercisable within 60 days. 

     

(13)

Mr. Thompson resigned from all positions with the Company on February 12, 2016.

 

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

 

Related parties can include any of our directors or executive officers, certain of our stockholders and their immediate family members. Each year, we prepare and require our directors and executive officers to complete Director and Officer Questionnaires identifying any transactions with us in which the officer or director or their family members have an interest. This helps us identify potential conflicts of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere, in any way with the interests of the Company as a whole. Our code of ethics and business conduct requires all directors, officers and employees who may have a potential or apparent conflict of interest to immediately notify our Audit Committee of the Board of Directors, which is responsible for considering and reporting to the Board any questions of possible conflicts of interest of Board members. Our code of ethics and business conduct further requires pre-clearance before any employee, officer or director engages in any personal or business activity that may raise concerns about conflict, potential conflict or apparent conflict of interest. Copies of our code of ethics and business conduct and the Audit Committee charter are posted on the corporate governance section of our website at www.towerstream.com .

 

At no time during the last fiscal year has any executive officer, director or any member of these individuals’ immediate families, any corporation or organization with whom any of these individuals is an affiliate or any trust or estate in which any of these individuals serves as a trustee or in a similar capacity or has a substantial beneficial interest been indebted to the Company or was involved in any transaction in which the amount exceeded $120,000 and such person had a direct or indirect material interest.

 

In evaluating related party transactions and potential conflicts of interest, our Chief Financial Officer and/or Chairman of the Audit Committee apply the same standards of good faith and fiduciary duty they apply to their general responsibilities. They will approve a related party transaction only when, in their good faith judgment, the transaction is in the best interest of the Company.

 

 
13

 

 

Director Independence

 

Each of William J. Bush , Howard L. Haronian, M.D., Paul Koehler and are independent directors, as provided in NASDAQ Marketplace Rule 5605(a)(2).

 

Item 14. Principal Accounting Fees and Services.

 

 

The following table sets forth the fees that the Company accrued or paid to Marcum LLP for the fiscal 2015 and fiscal 2014.

 

   

201 5

   

201 4

 

Audit Fees(1)

  $ 315,867     $ 218,087  

Audit-Related Fees(2)

           

Tax Fees(3)

           

All Other Fees

           

Total

  $ 315,867     $ 218,087  

 

 

(1)

Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements and internal control over financial reporting, quarterly review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, and audit services provided in connection with other statutory and regulatory filings. 

 

 

(2)

Audit-related fees relate to professional services rendered in connection with assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements, including due diligence.

 

 

(3)

Tax fees relate to professional services rendered for tax compliance, tax advice and tax planning for the Company.

 

Item 15. Exhibits and Financial Statement Schedules.

 

Exhibit No.

 

Description

31.1

 

Section 302 Certification of Principal Executive Officer

31.2

  

Section 302 Certification of Principal Financial Officer

32.1

 

Section 906 Certification of Principal Executive Officer

32.2

 

Section 906 Certification of Principal Financial Officer

   

 
14

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

TOWERSTREAM CORPORATION

 

 

 

     

Date: April 29,  2016

By:  

/s/ Philip Urso

 

 

 

Philip Urso

Chairman and Interim Chief Executive Officer

(Principal Executive Officer)

 

 
  By:  

/s/ Joseph P. Hernon

 
 

Joseph P. Hernon

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

 

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name

 

Capacity

 

Date

 

 

 

 

 

 

/s/ Philip Urso

 

 

Director – Chairman of the Board of Directors and Interim Chief Executive Officer

 

April 29,  2016

Philip Urso

 

 

(President and Principal Executive Officer)

 

 

 

 

 

 

 

 

/s/ Joseph P. Hernon

 

 

Chief Financial Officer (Principal Financial Officer and   

 

April 29,  2016

Joseph P. Hernon

 

 

Principal Accounting Officer)

 

 

 

 

 

 

 

 

/s/ Howard L. Haronian, M.D.

 

 

Director

 

April 29,  2016

Howard L. Haronian, M.D.

 

 

 

 

 

 

 

 

 

 

 

/s/ William J. Bush

    Director   April 29,  2016

William J. Bush

     

 

 
           

/s/ Paul Koehler

 

 

Director

 

April 29,  2016

Paul Koehler

 

 

 

 

 

   

 
15

 

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

31.1

 

Section 302 Certification of Principal Executive Officer

31.2

 

Section 302 Certification of Principal Financial Officer

32.1

 

Section 906 Certification of Principal Executive Officer

32.2

 

Section 906 Certification of Principal Financial Officer

 

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