8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 2, 2012

Towerstream Corporation 

(Exact Name of Registrant as Specified in Charter)

Delaware	001-33449	20-8259086
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

55 Hammarlund Way Middletown, RI	02842
(Address of principal executive offices)	(Zip Code)

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

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 DFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

Item 7.01. Regulation FD Disclosure

On November 8, 2012, Towerstream Corporation (the “Company”) issued a press release announcing results for the three and nine months ended September 30, 2012. A copy of the press release is attached to this report as Exhibit 99.1 and is being furnished pursuant to Item 2.02 and 7.01 and shall not be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The furnishing of the information in this Current Report on Form 8-K is not intended to, and does not, constitute a representation that such furnishing is required by Regulation FD or that the information contained in this Current Report on Form 8-K constitutes material investor information that is not otherwise publicly available.

The press release includes EBITDA calculations, which is not a generally accepted accounting principles (“GAAP”) financial measure. It is presented in the press release because the Registrant’s management uses this information in evaluating the operating efficiency and overall financial performance of its business. The Registrant’s management also believes that this information provides the users of the Registrant’s financial statements with valuable insight into its operating results. EBITDA is calculated as net income (loss) before interest, income taxes, depreciation and amortization. The Company defines adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding when applicable, stock-based compensation, other non-operating income or expenses, as well as gain or loss on (i) disposal of property and equipment, (ii) nonmonetary transactions, and (iii) business acquisitions. It is important to note, however, that non-GAAP financial measures as presented do not represent cash provided by or used in operating activities and may not be comparable to similarly titled measures reported by other companies. Neither should be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. A reconciliation of adjusted EBITDA, excluding non-recurring expenses and Small Cell rooftop tower locations expenses, net, as compared to the most directly comparable GAAP financial measure, net loss, is presented in a reconciliation table in the attached press release.

Any statements that are not historical facts contained in this Form 8-K are “forward-looking statements” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”) which statements may be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipates,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning. Forward-looking statements, include certain statements regarding intent, beliefs, expectations, projections, forecasts and plans, which are subject to numerous assumptions, risks, and uncertainties. A number of factors described from time to time in our periodic filings with the Securities and Exchange Commission could cause actual conditions, events, or results to differ significantly from those described in the forward-looking statements. All forward-looking statements included in this Form 8-K are based on information available at the time of the report. We assume no obligation to update any forward-looking statement. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On August 17, 2012, the Company’s Board of Directors approved and recommended for stockholder approval an amendment to its Certificate of Incorporation (the “Charter Amendment”) to increase the number of authorized shares of common stock from 70,000,000 to 95,000,000. On November 2, 2012, the Company’s stockholders approved the Charter Amendment. The final voting results at the Company’s annual meeting of stockholders with respect to the Charter Amendment were 36,292,972 shares voted for, 11,900,131 shares voted against and 786,244 shares abstained. The Charter Amendment was filed with the Delaware Secretary of State and became effective on November 2, 2012.

Item 5.07. Submission of Matters to a Vote of Security Holders.

On November 2, 2012, at the Company’s annual meeting of stockholders , the Company’s stockholders approved (i) electing the five directors named by the Company (Philip Urso, Jeffrey M. Thompson, Howard L. Haronian, M.D., Paul Koehler, and William J. Bush) to hold office until the next annual meeting of stockholders, (ii) the Charter Amendment described in Item 5.03 above; (iii) the amendment of the Company’s 2007 Incentive Stock Plan to increase the number of shares of common stock reserved for issuance from 2,500,000 shares of common stock to 5,000,000 shares of common stock (“Amendment of the 2007 Incentive Stock Plan”); (iv) the ratification of Marcum LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2012 (the “Auditor Ratification”); (v) the approval of a non-binding advisory vote on the compensation of the Company’s executive officers (“Advisory Vote on Executive Compensation”) and (vi) the frequency of the approval of future stockholder non-binding advisory votes on the compensation of the Company’s executive officers (“Frequency of Advisory Vote on Executive Compensation”).

As of the record date for the meeting of September 4, 2012, 54,367,774 shares of common stock, constituting all of the outstanding capital stock of the Company, were issued and outstanding, of which a total of 48,979,347 shares were voted at the annual meeting. The vote for each proposal was as follows:

Proposal	For		Against		Abstain		Broker Non- Votes
1. Election of five directors:
Philip Urso		19,703,784		1,915,946		138,067		27,221,550
Jeffrey M. Thompson		21,084,663		538,826		134,308		27,221,550
Howard L. Haronian, M.D.		17,646,145		3,982,098		129,554		27,221,550
Paul Koehler		19,569,675		2,054,068		134,054		27,221,550
William J. Bush		19,550,177		2,079,222		128,398		27,221,550
2. Charter Amendment		36,292,972		11,900,131		786,244		N/A
3. Amendment of the 2007 Incentive Stock Plan		14,056,000		7,416,654		285,143		27,221,550
4. Auditor Ratification		47,437,651		1,275,793		265,903		N/A
5. Advisory Vote on Executive Compensation		20,071,261		1,208,612		477,924		27,221,550

	3 Years		2 Years		1 Year		Abstain		Broker Non- Votes
6. Frequency of Advisory Vote on Executive Compensation		13,043,561		685,490		7,489,956		538,790		27,221,550

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

3.1	Certificate of Amendment to Certificate of Incorporation of Towerstream Corporation
99.1	Press Release, dated November 8, 2012

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TOWERSTREAM CORPORATION
Dated: November 8, 2012	By:	/s/ Joseph P. Hernon
		Joseph P. Hernon
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
3.1	Certificate of Amendment to Certificate of Incorporation of Towerstream Corporation
99.1	Press Release, dated November 8, 2012

EX-3.1

CERTIFICATE OF AMENDMENT

TO

CERTIFICATE OF INCORPORATION

OF

TOWERSTREAM CORPORATION

The undersigned, being the President and Chief Executive Officer of Towerstream Corporation, a corporation existing under the laws of the State of Delaware, does hereby certify under the seal of the said corporation as follows:

1. The certificate of incorporation of the Corporation is hereby amended by replacing Article Fourth in its entirety with the following:

FOURTH: A. Classes and number of Shares. The total number of shares of stock that the Corporation shall have authority to issue is one hundred million (100,000,000). The Classes and aggregate number of shares of each class which the Corporation shall have authority to issue are as follows:

1. Ninety five million (95,000,000) shares of Common Stock, par value $0.001 per share (the “Common Stock”); and

2. Five million (5,000,000) shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”); and

B. Blank Check Powers. The Corporation may issue any class of the Preferred Stock in any series. The

Board of Directors shall have authority to establish and designate series, and to fix the number of shares included in each such series and the variations in the relative rights, preferences and limitations as between series, provided that, if the stated dividends and amounts payable on liquidation are not paid in full, the shares of all series of the same class shall share ratably in the payment of dividends including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full, and in any distribution of assets other than by way of dividends in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full. Shares of each such series when issued shall be designated to distinguish the shares of each series from the shares of all other series.

2. The officers of the Corporation are authorized and directed to take such actions as are necessary in their discretion to effectuate the purposes of each of the above resolutions, including but not limited to the execution, delivery and filing of all necessary certificates, applications and other documents and the payment of all necessary fees in connection therewith.

3. The number of shares of the corporation outstanding and entitled to vote on an amendment to the Certificate of Incorporation is 54,367,774 and the foregoing change and amendment has been consented to and approved by the vote of the stockholders of the Corporation holding at least a majority of each class of stock outstanding and entitled to vote thereon.

IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be hereunto affixed and this Certificate of Amendment of the Corporation's Certificate of Incorporation, as amended, to be signed by Jeffrey M. Thompson, its President and Chief Executive Officer, this 2^nd day of November 2012.

TOWERSTREAM CORPORATION
By:	/s/ Jeffrey M. Thompson
	Jeffrey M. Thompson
	President and Chief Executive Officer

EX-99.1

Towerstream Reports Third Quarter 2012 Results

MIDDLETOWN, R.I., November 8, 2012 – Towerstream Corporation (NASDAQ: TWER) (the “Company”), a leading 4G and Small Cell Rooftop Tower (“rooftop tower locations”) company, announced results for the third quarter ended September 30, 2012.

Third Quarter Operating Highlights

· Adjusted EBITDA profitability, excluding non-recurring expenses and net costs associated with the rooftop tower locations, was $1.5 million for the third quarter 2012 compared to $1.3 million for the second quarter 2012 and $1.1 million for the third quarter 2011.

· Customer churn for the third quarter 2012 was 1.54% compared to 1.65% for the second quarter 2012 and 1.27% for the third quarter 2011. Customer churn remained within the Company’s target range of 1.4% to 1.7% for the twelfth consecutive quarter.

· Average revenue per user (“ARPU”) of all customers increased to $714 compared to $708 for the second quarter 2012 and $709 for the third quarter 2011.

· Customer upgrades for the third quarter were at record levels for the second consecutive quarter.

Management Comments

“We made tremendous progress on our small cell network in the third quarter and now have more than 10,000 Wi-Fi and small cell antenna locations available for lease,” stated Jeffrey Thompson, President and Chief Executive Officer.  “Earlier this week, AT&T announced its plans to deploy 40,000+ small cell antennas and we believe we are well positioned to be part of their solution.”

“We are pleased to report record adjusted EBITDA profitability for our fixed wireless business and our goal is to reach cash flow profitability for that business in the first half of 2013,” noted Joseph Hernon, Chief Financial Officer.  “The launch of small cell in early 2013 presents a new backhaul revenue opportunity for our fixed wireless business”.

Page 1 of 10

Selected Financial Data and Key Operating Metrics

(All dollars are in thousands except ARPU)

	(Unaudited)
	Three months ended
	9/30/2012			6/30/2012			9/30/2011
Selected Financial Data
Revenues	$	8,127		$	8,103		$	6,776
Gross margin		45	%		54	%		67	%
Adjusted gross margin excluding rooftop tower locations expenses		71	%		70	%		73	%
Depreciation and amortization		3,399			3,348			2,299
Core operating expenses (1)(2)		5,669			5,750			4,875
Operating loss (1)		(5,380	)		(4,714	)		(2,629	)
Gain (loss) on business acquisition		-			(40	)		-
Net loss (1)		(5,408	)		(4,759	)		(2,620	)
Adjusted EBITDA (2)		(1,424	)		(884	)		96
Non-recurring expenses		55			41			112
Rooftop tower locations expenses, net		2,820			2,180			880
Adjusted EBITDA excluding non-recurring and rooftop tower locations expenses, net (2)		1,451			1,337			1,088
Capital expenditures
Wireless broadband	$	1,935		$	3,779		$	2,627
Rooftop tower locations		4,299			4,046			1,663
Key Operating Metrics
Churn rate (2)		1.54	%		1.65	%		1.27	%
ARPU (2)	$	714		$	708		$	709
ARPU of new customers (2)		560			477			625

(1) Includes stock-based compensation of $438, $392 and $415, respectively.

(2) See Non-GAAP Measures below for a definition and reconciliation of Adjusted EBITDA, and definitions of Core Operating Expenses, Churn, ARPU and ARPU of new customers.

Operating Outlook and Guidance

· Revenues for the fourth quarter 2012 are expected to range between $8.1 million to $8.2 million.

· Adjusted EBITDA profitability is expected to range between $1.4 million to $1.6 million.

Non-GAAP Measures

The terms “Adjusted EBITDA,” “Churn,” “Churn rate,” “ARPU,” and “Market Cash Flow” are measurements used by Towerstream to monitor business performance and are not recognized measures under generally accepted accounting principles (“GAAP”). Accordingly, investors are cautioned in using or relying upon these measures as alternatives to recognized GAAP measures. Our methods of calculating these measures may differ from other issuers and, accordingly, may not be comparable to similar measures presented by other issuers.

Page 2 of 10

We focus on Adjusted EBITDA as a principal indicator of the operating performance of our business. EBITDA represents net income (loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation, other non-operating income or expenses as well as gain or loss on (i) disposal of property and equipment, (ii) nonmonetary transactions, and (iii) business acquisitions. Adjusted Market EBITDA also excludes corporate overhead expenses and other centralized costs. We believe that Adjusted Market EBITDA trends are insightful indicators of our markets’ relative performance, and whether our markets are able to produce sufficient market cash flow to fund working capital and capital expenditure needs.

The term “Core Operating Expenses” includes customer support services, sales and marketing, and general and administrative expenses, and excludes cost of revenues, depreciation and amortization.

The terms “Churn” and “Churn rate” refer to the percent of revenue lost on a monthly basis from customers disconnecting from our network or reducing the amount of their bandwidth. The term “ARPU” refers to the monthly average revenue per user, or customer, being generated from those customers under contract at the end of each indicated period. We calculate ARPU by dividing our monthly recurring revenue (“MRR”) at the end of a period by the number of customers generating that MRR. “ARPU of new customers” is calculated in the same manner but only includes new customers who entered into contracts during the indicated period. Market Cash Flow represents the amount of cash generated in a market after deducting a market’s direct operating expenses from that market’s revenues. Market Cash Flow does not include (i) centralized costs which support all markets collectively or (ii) any network related capital expenditures incurred in a market.

The Non-GAAP measure, Adjusted EBITDA, excluding non-recurring expenses and rooftop tower locations expenses, net, has been reconciled to Net loss as follows:

(All dollars are in thousands)

	Three months ended
	9/30/2012			6/30/2012			9/30/2011
Reconciliation of Non-GAAP to GAAP:
Adjusted EBITDA, excluding non-recurring expenses and rooftop tower locations expenses, net	$	1,451		$	1,337		$	1,088
Depreciation and amortization		(3,399	)		(3,348	)		(2,299	)
Non-recurring expenses, primarily acquisition-related		(55	)		(41	)		(112	)
Rooftop tower locations expenses, net		(2,820	)		(2,180	)		(880	)
Stock-based compensation		(438	)		(392	)		(415	)
Loss on property and equipment		(48	)		(12	)		(1	)
Loss on nonmonetary transactions		(71	)		(78	)		(10	)
Interest expense		(37	)		(17	)		(9	)
Gain (loss) on business acquisition		-			(40	)		-
Other income (expense), net		(1	)		(2	)		(4	)
Interest income		10			14			22
Net loss	$	(5,408	)	$	(4,759	)	$	(2,620	)

Page 3 of 10

Summary Condensed Consolidated Financial Statements

(All dollars are in thousands except per share amounts)

Statement of Operations	(Unaudited)						(Unaudited)
	Three months ended September 30,						Nine months ended September 30,
	2012			2011			2012			2011
Revenues	$	8,127		$	6,776		$	24,050		$	19,310
Operating Expenses
Cost of revenues (exclusive of depreciation)		4,439			2,231			11,226			5,583
Depreciation and amortization		3,399			2,299			10,029			6,487
Customer support services		1,129			870			3,369			2,374
Sales and marketing		1,518			1,348			4,458			4,069
General and administrative		3,022			2,657			9,432			6,797
Total Operating Expenses		13,507			9,405			38,514			25,310
Operating Loss		(5,380	)		(2,629	)		(14,464	)		(6,000	)
Other Income (Expense)
Gain (loss) on business acquisition		-			-			(40	)		1,045
Interest income		10			22			41			32
Interest expense		(37	)		(9	)		(76	)		(13	)
Other income (expense), net		(1	)		(4	)		(8	)		(9	)
Total Other Income (Expense)		(28	)		9			(83	)		1,055
Net Loss	$	(5,408	)	$	(2,620	)	$	(14,547	)	$	(4,945	)
Net loss per common share – basic and diluted	$	(0.10	)	$	(0.05	)	$	(0.27	)	$	(0.11	)
Weighted average common shares outstanding – basic and diluted		54,403			51,599			54,361			45,517

Analysis of Third Quarter Results of Operations

Revenues for the third quarter 2012 increased by less than 1% from the second quarter 2012 and increased 20% compared to the third quarter 2011. The year-over-year increase was driven by a 14% growth in our customer base from approximately 3,200 customers at the end of the third quarter 2011 to approximately 3,600 at the end of the third quarter 2012.

ARPU of all customers in the third quarter 2012 increased 1% compared to both the second quarter 2012 and the third quarter 2011. ARPU of new customers increased 17% in the third quarter 2012 compared to the second quarter 2012 and decreased 10% compared to the third quarter 2011. ARPU of new customers can fluctuate on a quarter-to-quarter basis depending upon the relative percentage of customers purchasing lower bandwidth service, known as multipoint, and higher bandwidth service, known as point-to-point.

Customer churn during the third quarter 2012 was 1.54% compared to 1.65% during the second quarter 2012 and 1.27% during the third quarter 2011. Our churn rate was within our targeted range of 1.4% to 1.7% and remains low compared to industry averages.

Page 4 of 10

Cost of revenue increased 19% in the third quarter 2012 compared to the second quarter 2012 and increased by 99% compared to the third quarter 2011. The Company spent $2.1 million in the third quarter 2012 related to the construction of its rooftop tower locations as compared to $1.3 million in the second quarter 2012 and $0.4 million in the third quarter 2011. The year-over-year increase also related to additional network expenses associated with the acquisition of Color Broadband in the fourth quarter 2011.

Depreciation expense increased 9% in the third quarter 2012 compared to the second quarter 2012 and increased 56% compared to the third quarter 2011. The base of depreciable assets was 9% higher at the end of the third quarter 2012 as compared to the second quarter 2012 and 57% higher compared to the third quarter of 2011. The increased depreciable base reflects continued growth in the core business as well as spending on the rooftop tower locations.

Amortization expense decreased 18% in the third quarter 2012 compared to the second quarter 2012 and increased 25% compared to the third quarter 2011. The sequential decrease relates to customer based intangible assets recorded in connection with the acquisition of Pipeline Wireless which were fully amortized in May 2012. The year-over-year increase relates to customer based intangible assets recorded in connection with the acquisition of Color Broadband in the fourth quarter 2011.

Customer support expenses decreased by 4% in the third quarter 2012 compared to the second quarter 2012 and increased 30% compared to the third quarter 2011. Costs associated with rooftop tower locations totaled approximately $244,000 in the third quarter 2012 compared to approximately $252,000 in the second quarter 2012 and approximately $150,000 in the third quarter 2011. In addition, there were staffing additions and other costs incurred to support our customer base which increased 23% over the one year period.

Sales and marketing expenses increased by less than 1% in the third quarter 2012 compared to the second quarter 2012 and increased 13% compared to the third quarter 2011. The year-over-year increase primarily related to higher commissions and bonuses.

General and administrative expenses decreased by 1% in the third quarter 2012 compared to the second quarter 2012 and increased 14% compared to the third quarter 2011. Costs associated with rooftop tower locations totaled approximately $0.6 million in both the third quarter 2012 and the second quarter 2012 compared to approximately $0.3 million in the third quarter 2011. The year-over-year increase also relates to higher information technology spending.

Capital expenditures totaled $6.2 million for the third quarter 2012 as compared to $7.8 million for the second quarter 2012 and $4.3 million for the third quarter 2011. The Company spent $4.3 million in the third quarter 2012 related to the construction of its rooftop tower locations as compared to $4.0 million in the second quarter 2012 and $1.7 million in the third quarter 2011.

Page 5 of 10

Balance Sheet

(All dollars are in thousands)

	(Unaudited)			(Audited)
	September 30, 2012			December 31, 2011
Assets
Current Assets
Cash and cash equivalents	$	23,132		$	44,672
Other		1,399			1,216
Total Current Assets		24,531			45,888
Property and equipment, net		39,990			27,531
Other assets		8,712			10,218
Total Assets		73,233			83,637
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses		4,608			3,564
Deferred revenues and other		2,360			2,277
Total Current Liabilities		6,968			5,841
Long-Term Liabilities		2,355			651
Total Liabilities		9,323			6,492
Stockholders’ Equity
Common stock		54			54
Additional paid-in-capital		120,782			119,470
Accumulated deficit		(56,926	)		(42,379	)
Total Stockholders’ Equity		63,910			77,145
Total Liabilities and Stockholders’ Equity	$	73,233		$	83,637
Statement of Cash Flows (Unaudited)	Nine months ended September 30,
	2012			2011
Cash Flows From Operating Activities
Net loss	$	(14,547	)	$	(4,945	)
Non-cash adjustments:
Depreciation & amortization		10,029			6,487
Stock-based compensation		1,353			661
(Gain) loss on business acquisition		40			(1,045	)
Other		216			202
Changes in operating assets and liabilities		(725	)		102
Net Cash (Used in) Provided By Operating Activities		(3,634	)		1,462
Cash Flows From Investing Activities
Acquisitions of property and equipment		(17,382	)		(10,359	)
Acquisition of business		-			(1,600	)
Other		(501	)		(136	)
Net Cash Used in Investing Activities		(17,883	)		(12,095	)
Cash Flows From Financing Activities
Repayment of capital leases		(385	)		(97	)
Proceeds from stock issuances		397			309
Net proceeds from sale of common stock		-			38,835
Other		(35	)		-
Net Cash (Used in) Provided By Financing Activities		(23	)		39,047
Net (Decrease) Increase In Cash and Cash Equivalents		(21,540	)		28,414
Cash and Cash Equivalents – Beginning		44,672			23,173
Cash and Cash Equivalents – Ending	$	23,132		$	51,587

Page 6 of 10

Market data for the three months ended September 30, 2012

(All dollars are in thousands)

Market	Revenues		Cost of Revenues(1)		Gross Margin (1)					Operating Costs		Adjusted Market EBITDA
Los Angeles	$	1,995	$	599	$	1,396		70	%	$	397	$	999
New York		1,858		435		1,423		77	%		320		1,103
Boston		1,698		388		1,310		77	%		220		1,090
Chicago		944		304		640		68	%		170		470
Miami		413		117		296		72	%		94		202
San Francisco		373		87		286		77	%		80		206
Las Vegas-Reno		370		158		212		57	%		29		183
Dallas-Fort Worth		158		83		75		48	%		90		(15	)
Seattle		144		54		90		63	%		36		54
Providence-Newport		132		65		67		51	%		30		37
Philadelphia		30		22		8		26	%		32		(24	)
Nashville		12		14		(2	)	-%			8		(10	)
Total	$	8,127	$	2,326	$	5,801		71	%	$	1,506	$	4,295
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
Adjusted market EBITDA												$	4,295
Centralized costs (1)													(940	)
Corporate expenses													(2,012	)
Rooftop tower locations expenses													(2,886	)
Depreciation and amortization													(3,399	)
Stock-based compensation													(438	)
Other income (expense)													(28	)
Net loss												$	(5,408	)

Market data for the three months ended September 30, 2011

(All dollars are in thousands)

Market	Revenues		Cost of Revenues(1)		Gross Margin(1)				Operating Costs		Adjusted Market EBITDA
Boston	$	1,695	$	390	$	1,305	77	%	$	224	$	1,081
New York		1,533		349		1,184	77	%		310		874
Los Angeles		1,087		223		864	79	%		263		601
Chicago		870		266		604	69	%		151		453
Las Vegas-Reno		409		180		229	56	%		44		185
San Francisco		370		67		303	82	%		92		211
Miami		365		81		284	78	%		100		184
Dallas-Fort Worth		166		85		81	49	%		80		1
Seattle		125		55		70	56	%		27		43
Providence-Newport		120		51		69	58	%		24		45
Philadelphia		23		15		8	35	%		28		(20	)
Nashville		13		1		12	92	%		11		1
Total	$	6,776	$	1,763	$	5,013	74	%	$	1,354	$	3,659

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Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
Adjusted market EBITDA	$	3,659
Centralized costs (1)		(761	)
Corporate expenses		(1,933	)
Rooftop tower locations expenses		(880	)
Depreciation and amortization		(2,299	)
Stock-based compensation		(415	)
Other income (expense)		9
Net loss	$	(2,620	)

Market data for the nine months ended September 30, 2012

(All dollars are in thousands)

Market	Revenues		Cost of Revenues(1)		Gross Margin(1)					Operating Costs		Adjusted Market EBITDA
Los Angeles	$	5,888	$	1,798	$	4,090		69	%	$	1,109	$	2,981
New York		5,349		1,340		4,009		75	%		911		3,098
Boston		5,135		1,147		3,988		78	%		710		3,278
Chicago		2,743		836		1,907		70	%		507		1,400
Miami		1,238		299		939		76	%		291		648
Las Vegas-Reno		1,199		464		735		61	%		115		620
San Francisco		1,160		277		883		76	%		244		639
Dallas-Fort Worth		488		258		230		47	%		258		(28	)
Seattle		375		173		202		54	%		88		114
Providence-Newport		365		150		215		59	%		93		122
Philadelphia		79		55		24		30	%		77		(53	)
Nashville		31		42		(11	)	-%			26		(37	)
Total	$	24,050	$	6,839	$	17,211		72	%	$	4,429	$	12,782
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
Adjusted market EBITDA												$	12,782
Centralized costs (1)													(2,829	)
Corporate expenses													(6,300	)
Rooftop tower locations expenses													(6,735	)
Depreciation and amortization													(10,029	)
Stock-based compensation													(1,353	)
Other income (expense)													(83	)
Net loss												$	(14,547	)

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Market data for the nine months ended September 30, 2011

(All dollars are in thousands)

Market	Revenues		Cost of Revenues(1)		Gross Margin(1)				Operating Costs		Adjusted Market EBITDA
Boston	$	5,054	$	1,183	$	3,871	77	%	$	722	$	3,149
New York		4,484		1,025		3,459	77	%		946		2,513
Los Angeles		3,085		589		2,496	81	%		799		1,697
Chicago		2,604		788		1,816	70	%		499		1,317
San Francisco		1,105		199		906	82	%		283		623
Miami		1,008		229		779	77	%		295		484
Las Vegas-Reno		598		256		342	57	%		53		289
Dallas-Fort Worth		490		245		245	50	%		215		30
Seattle		400		163		237	59	%		90		147
Providence-Newport		351		134		217	62	%		75		142
Philadelphia		87		46		41	47	%		84		(43	)
Nashville		44		21		23	52	%		34		(11	)
Total	$	19,310	$	4,878	$	14,432	75	%	$	4,095	$	10,337
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
Adjusted market EBITDA											$	10,337
Centralized costs (1)												(2,243	)
Corporate expenses												(5,540	)
Rooftop tower locations expenses												(1,406	)
Depreciation and amortization												(6,487	)
Stock-based compensation												(661	)
Other income (expense)												1,055
Net loss											$	(4,945	)

(1) Certain expenses are reported as Cost of Revenues for financial statement purposes but are included in other line items in the Market Data table, either because they are not specific to any market or they relate to rooftop tower locations.

Conference Call and Webcast

A conference call led by President and Chief Executive Officer, Jeff Thompson, and Chief Financial Officer, Joseph Hernon, will be held on November 8, 2012 at 5:00 p.m. ETto review our financial results and provide an update on current business developments.

Interested parties may participate in the conference by dialing 877-755-7423 or 678-894-3069 (for international callers). A telephonic replay of the conference may be accessed approximately two hours after the call through November 14, 2012 at 11:59 p.m. ET by dialing 800-585-8367 or 404-537-3406 (for international callers) using pass code 56988940.

The call will also be webcast and can be accessed in a listen-only mode on the Company’s website at http://ir.towerstream.com/events.cfm.

About Towerstream Corporation

Towerstream (NASDAQ: TWER) is a leading 4G and Small Cell Rooftop Tower company. The company owns, operates, and leases Wi-Fi and Small Cell rooftop tower locations to cellular phone operators, tower, Internet and cable companies and hosts a variety of customers on its network. Towerstream was originally founded in 2000 to deliver fixed-wireless high-speed Internet access to businesses and to date offers broadband services in over 12 urban markets including New York City, Boston, Los Angeles, Chicago, Philadelphia, the San Francisco Bay area, Miami, Seattle, Dallas-Fort Worth, Nashville, Las Vegas-Reno and the greater Providence area. For more information on Towerstream services, please visit www.towerstream.com and/or follow us @Towerstream.

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The Towerstream Corporation logo is available at: http://www.globenewswire.com/newsroom/prs/?pkgid=6570

Safe Harbor

Certain statements contained in this press release are “forward-looking statements” within the meaning of applicable federal securities laws, including, without limitation, anything relating or referring to future financial results and plans for future business development activities, and are thus prospective. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified based on current expectations. Such risks and uncertainties include, without limitation, the risks and uncertainties set forth from time to time in reports filed by the Company with the Securities and Exchange Commission, including, without limitation, risk related to our ability to deploy and expand rooftop tower locations in the New York City and other key markets. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Consequently, future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements contained herein. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

INVESTOR CONTACT:

Terry McGovern

Vision Advisors

415-902-3001

mcgovern@visionadvisors.net

MEDIA CONTACT:

Todd Barrish

Indicate Media
646-396-6090

todd@indicatemedia.com

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