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): May 9, 2013

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 May 9, 2013, Towerstream Corporation (the “Company”) issued a press release announcing results for the three months ended March 31, 2013. 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 Company uses certain Non-GAAP measures to monitor the Company's business performance and that of its segments. These Non-GAAP measures are not recognized under generally accepted accounting principles ("GAAP"). Accordingly, investors are cautioned about using or relying on these measures as alternatives to recognized GAAP measures. The Company’s methods of calculating these measures may not be comparable to similar measures presented by other companies.

A definition of key Non-GAAP measures that the Company employs, and how it uses them to monitor business performance, are as follows:

“EBITDA” represents net income (loss) before interest, income taxes, depreciation and amortization.

“Adjusted EBITDA” represents 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. The Company believes that Adjusted Market EBITDA trends are insightful indicators of its markets’ relative performance, and whether its markets are able to produce sufficient market cash flow to fund working capital and capital expenditure needs.

“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.

“Net Cash Flows” represents Adjusted EBITDA less capital expenditures.

The following reconciliations of non-GAAP measures to GAAP financial measures are presented in the attached press release: (i) Adjusted EBITDA, Fixed Wireless Segment Markets to Net Loss, (ii) Adjusted EBITDA, Segment Basis to Net Loss, and (iii) Net Cash Flow, Segment Basis to Net Cash Used in Operating Activities.

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 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release, dated May 9, 2013

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: May 9, 2013	By:	/s/ Joseph P. Hernon
		Joseph P. Hernon
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated May 9, 2013

EX-99.1

Towerstream Reports First Quarter 2013 Results

MIDDLETOWN, R.I., May 9, 2013 – Towerstream Corporation (NASDAQ: TWER) (the “Company”), a leading 4G and Small Cell Rooftop Tower company, announced results for the first quarter ended March 31, 2013.

First Quarter Operating Highlights

· Revenue increased 6% to $8.3 million during the first quarter 2013 compared to the first quarter 2012 and increased 1% compared to the fourth quarter 2012.

· Customer churn for the first quarter 2013 was 1.64% compared to 1.58% for the first quarter 2012 and 1.59% for the fourth quarter 2012. Customer churn remained within the Company’s target range of 1.4% to 1.7% for the fourteenth consecutive quarter.

· Average revenue per user (“ARPU”) of new customers (excluding acquisitions) increased to $630 during the first quarter 2013 compared to $545 for the first quarter 2012 and $542 for the fourth quarter 2012.

· Total ARPU of all customers increased for the fifth consecutive quarter to $727.

· Recognized gain of $941,457 related to the acquisition of Delos Internet which closed in February 2013. This transaction brings us into Houston, Texas and expands our national presence to thirteen markets, including nine of the eleven largest business markets in the United States.

· Formed Hetnets Tower Corporation, a wholly owned subsidiary which will provide a range of shared wireless infrastructure services and access.

· Strong financial position with cash and cash equivalents totaling $40.3 million at March 31, 2013.

Management Comments

"We built Towerstream's fixed wireless business from the ground up and achieved cash flow profitability,” stated Jeffrey Thompson, President and Chief Executive Officer.  “This is a very exciting milestone for the company and we believe we can attain the same result with Hetnets, our tower subsidiary, while addressing a much larger market opportunity.  We are very encouraged by the acceleration we are seeing in small cell business activity for WiFi colocation, which gives us confidence in our strategy and market position."

“Beginning this quarter, we are reporting on a Segment Basis so that investors can clearly understand the operating performance of our two businesses,” stated Joseph Hernon, Chief Financial Officer. “Our Fixed Wireless business continues to perform strongly and reached cash flow profitability in the first quarter under our prior reporting method which was a goal that we had previously established and communicated to investors.”

Page 1 of 9

Selected Financial Data and Key Operating Metrics

(All dollars are in thousands except ARPU)

	(Unaudited)
	Three months ended
	3/31/2013			12/31/2012			3/31/2012
Revenues	$	8,299		$	8,229		$	7,819
Gross margin
Consolidated		37	%		38	%		61	%
Fixed wireless		70	%		69	%		71	%
Capital expenditures
Fixed wireless	$	1,087		$	2,337		$	2,630
Shared wireless infrastructure		136			2,430			1,918
Corporate		104			126			1,313
Churn rate (1)		1.64	%		1.59	%		1.58	%
ARPU (1)	$	727		$	717		$	706
ARPU of new customers (1)		630			542			545
Cash and cash equivalents	$	40,329		$	15,152		$	38,675

(1) See Non-GAAP Measures below for the definitions of Churn, ARPU and ARPU of new customers.

Consolidated Statement of Operations
(All dollars are in thousands except per share amounts)	(Unaudited) Three months ended March 31,
	2013			2012
Revenues	$	8,299		$	7,819
Operating Expenses
Cost of revenues		5,231			3,073
Depreciation and amortization		3,871			3,281
Customer support		1,147			1,162
Sales and marketing		1,441			1,482
General and administrative		3,137			3,191
Total Operating Expenses		14,827			12,189
Operating Loss		(6,528	)		(4,370	)
Other Income (Expense)
Gain on business acquisition		941			-
Interest income		-			17
Interest expense		(36	)		(22	)
Other income (expense), net		(3	)		(5	)
Total Other Income (Expense)		902			(10	)
Net Loss	$	(5,626	)	$	(4,380	)
Net loss per common share – basic and diluted	$	(0.09	)	$	(0.08	)
Weighted average common shares outstanding – basic and diluted		61,465			54,312

Page 2 of 9

Statement of Operations - Segment Basis

	Three months ended March 31, 2013 (Unaudited)
	Fixed Wireless		Shared Wireless Infrastructure			Corporate			Eliminations			Total
Revenues	$	8,187	$	158		$	-		$	(46	)	$	8,299
Operating Expenses
Cost of revenues		2,431		2,793			53			(46	)		5,231
Depreciation and amortization		2,820		864			187			-			3,871
Customer support		178		103			866			-			1,147
Sales and marketing		1,297		47			97			-			1,441
General and administrative		147		190			2,800			-			3,137
Total Operating Expenses		6,873		3,997			4,003			(46	)		14,827
Operating Income (Loss)	$	1,314	$	(3,839	)	$	(4,003	)	$	-		$	(6,528	)
Non-recurring expenses, primarily acquisition related		-		-			65			-			65
Non-cash expenses (a)		2,936		867			584			-			4,387
Adjusted EBITDA (b)		4,250		(2,972	)		(3,354	)		-			(2,076	)
Less: Capital  expenditures		1,087		136			104			-			1,327
Net Cash Flow (b)	$	3,163	$	(3,108	)	$	(3,458	)	$	-		$	(3,403	)

(a) Includes depreciation and amortization, stock-based compensation, loss on property and equipment, and loss on nonmonetary transactions.

(b) See Non-GAAP Measures below for a definition and reconciliation of (i) Adjusted EBITDA to Net Loss and (ii) Net Cash Flow to Net Cash Used in Operating Activities.

Effective January 1, 2013, the Company has two reportable segments. The Fixed Wireless segment provides fixed wireless broadband services to commercial customers and delivers access over a wireless network transmitting over both regulated and unregulated radio spectrum. The Shared Wireless Infrastructure segment offers a range of rental options on street level rooftops related to (i) the installation of customer owned Small Cells, (ii) the offloading of mobile data, and (iii) backhaul, power and other related telecommunications.

The Corporate group includes corporate overhead and centralized activities which support our overall operations. Corporate overhead includes administrative personnel, including executive management, and other support functions such as information technology and facilities. Centralized operations include network operations, customer care, and the management of network assets. Corporate costs are not allocated to the segments because such costs are managed on a centralized basis. Management also believes that not allocating these centralized costs provides a better reflection of the direct operating performance of each segment.

Page 3 of 9

Summary Condensed Balance Sheet (All dollars are in thousands)
	(Unaudited) March 31, 2013			(Audited) December 31, 2012
Assets
Current Assets
Cash and cash equivalents	$	40,329		$	15,152
Other		1,964			1,553
Total Current Assets		42,293			16,705
Property and equipment, net		40,974			41,982
Other assets		9,211			8,423
Total Assets		92,478			67,110
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable and accrued expenses		3,048			4,149
Deferred revenues and other		2,407			2,468
Total Current Liabilities		5,455			6,617
Long-Term Liabilities		2,610			2,689
Total Liabilities		8,065			9,306
Stockholders’ Equity
Common stock		66			54
Additional paid-in-capital		153,342			121,118
Accumulated deficit		(68,995	)		(63,368	)
Total Stockholders’ Equity		84,413			57,804
Total Liabilities and Stockholders’ Equity	$	92,478		$	67,110

Summary Condensed Statement of Cash Flows   (Unaudited)	Three months ended March 31,
	2013			2012
Cash Flows from Operating Activities
Net loss	$	(5,626	)	$	(4,380	)
Non-cash adjustments:
Depreciation & amortization		3,871			3,281
Stock-based compensation		397			524
Gain on business acquisition		(941	)		-
Other		12			21
Changes in operating assets and liabilities		(2,136	)		(1,820	)
Net Cash Used in Operating Activities		(4,423	)		(2,374	)
Cash Flows From Investing Activities
Acquisitions of property and equipment		(697	)		(3,434	)
Acquisition of a business, net of cash acquired		(223	)		-
Other		(56	)		(126	)
Net Cash Used in Investing Activities		(976	)		(3,560	)
Cash Flows From Financing Activities
Payments on capital leases		(192	)		(131	)
Proceeds from stock issuances		268			68
Net proceeds from sale of common stock		30,500			-
Net Cash Provided by (Used in) Financing Activities		30,576			(63	)
Net Increase (Decrease) In Cash and Cash Equivalents		25,177			(5,997	)
Cash and cash equivalents – beginning		15,152			44,672
Cash and cash equivalents – ending	$	40,329		$	38,675

Page 4 of 9

Fixed Wireless Segment Market data for the three months ended March 31, 2013

(All dollars are in thousands)

Market	Revenues		Cost of Revenues		Gross Margin					Operating Costs		Adjusted Market EBITDA
Los Angeles	$	2,070	$	559	$	1,511		73	%	$	382	$	1,129
Boston		1,669		358		1,311		79	%		187		1,124
New York		1,886		602		1,284		68	%		333		951
Chicago		913		310		603		66	%		109		494
Las Vegas-Reno		388		151		237		61	%		38		199
Miami		377		99		278		74	%		84		194
San Francisco		303		107		196		65	%		80		116
Providence-Newport		127		49		78		61	%		18		60
Seattle		137		51		86		63	%		34		52
Houston		53		23		30		57	%		11		19
Dallas-Fort Worth		171		89		82		48	%		75		7
Philadelphia		40		18		22		55	%		23		(1	)
Nashville		6		15		(9	)	-%			4		(13	)
Total	$	8,140	$	2,431	$	5,709		70	%	$	1,378	$	4,331

Fixed Wireless Segment Market data for the three months ended March 31, 2012

(All dollars are in thousands)

Market	Revenues		Cost of Revenues		Gross Margin					Operating Costs		Adjusted Market EBITDA
Los Angeles	$	1,967	$	569	$	1,398		71	%	$	340	$	1,058
Boston		1,689		394		1,295		77	%		266		1,029
New York		1,648		501		1,147		70	%		306		841
Chicago		861		257		604		70	%		144		460
Las Vegas-Reno		432		153		279		65	%		40		239
Miami		419		88		331		79	%		102		229
San Francisco		377		96		281		75	%		84		197
Providence-Newport		108		40		68		63	%		30		38
Seattle		116		60		56		48	%		24		32
Dallas-Fort Worth		169		83		86		51	%		78		8
Nashville		9		13		(4	)	-%			9		(13	)
Philadelphia		24		16		8		33	%		22		(14	)
Total	$	7,819	$	2,270	$	5,549		71	%	$	1,445	$	4,104

Operating Outlook and Guidance

· Revenues for the second quarter 2013 are expected to range between $8.3 million to $8.5 million.

· Adjusted EBITDA, on a segment basis, is expected to range between profitability of $4.2 million to $4.4 million for the Fixed Wireless segment.

Non-GAAP Measures and Reconciliations to GAAP Measures

We use certain Non-GAAP measures to monitor the Company's business performance and that of our segments. These Non-GAAP measures are not recognized under generally accepted accounting principles ("GAAP"). Accordingly, investors are cautioned about using or relying on these measures as alternatives to recognized GAAP measures. Our methods of calculating these measures may not be comparable to similar measures presented by other companies.

Page 5 of 9

A definition of the Non-GAAP measures that we employ, and how we use them to monitor business performance, are as follows:

“EBITDA” represents net income (loss) before interest, income taxes, depreciation and amortization.

“Adjusted EBITDA” represents 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.

“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.

“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.

“Corporate” includes corporate overhead and centralized activities which support our overall operations.

“Net Cash Flows” represents Adjusted EBITDA less capital expenditures.

“Non-Core Expenses” relate to our efforts in 2012 to develop other wireless technology solutions and services, and primarily consisted of rent payments for street level rooftops, costs associated with constructing an offload network and payroll costs for employees working on these projects.

"Shared Wireless Infrastructure, Net" represents the net operating results for that business segment.

Page 6 of 9

A reconciliation of non-GAAP measures to GAAP financial measures is as follows (amounts in thousands):

I. Adjusted EBITDA, Fixed Wireless Segment Markets to Net Loss

For the three months ended March 31, 2013

Adjusted Market EBITDA	$	4,331
Fixed Wireless, non-market specific
Other expenses		(243	)
Depreciation and amortization		(2,820	)
Shared wireless infrastructure, net		(3,793	)
Corporate		(4,003	)
Other income (expense)		902
Net loss	$	(5,626	)

For the three months ended March 31, 2012

Adjusted market EBITDA	$	4,104
Fixed wireless, non-market specific
Other expenses		(144	)
Depreciation and amortization		(2,787	)
Non-core expenses		(1,300	)
Corporate		(4,243	)
Other income (expense)		(10	)
Net loss	$	(4,380	)

II. Adjusted EBITDA, Segment Basis to Net Loss

For the three months ended March 31, 2013

Adjusted EBITDA	$	(2,076	)
Depreciation and amortization		(3,871	)
Non-recurring expenses		(65	)
Stock-based compensation		(397	)
Loss on property and equipment		(42	)
Loss on non-monetary transactions		(77	)
Operating Income (Loss)	$	(6,528	)
Interest expense		(36	)
Gain on business acquisition		941
Other income (expense), net		(3	)
Net loss	$	(5,626	)

Page 7 of 9

III. Net Cash Flow, Segment Basis to Net Cash Used in Operating Activities

For the three months ended March 31, 2013

Net cash flow, segment basis	$	(3,403	)
Capital expenditures		1,327
Non-recurring expenses		(65	)
Changes in operating assets and liabilities, net		(2,136	)
Other, net		(146	)
Net cash used in operating activities	$	(4,423	)

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 May 9, 2013 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 May 16, 2013 at 11:59 p.m. ET by dialing 855-859-2056 or 404-537-3406 (for international callers) using pass code 53209923.

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 13 urban markets including New York City, Boston, Los Angeles, Chicago, Philadelphia, the San Francisco Bay area, Miami, Seattle, Dallas-Fort Worth, Houston, 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.

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

About Hetnets Tower Corporation

In early 2013, we formed a wholly owned subsidiary, Hetnets Tower Corporation (“Hetnets”). Since 2010, the Company has been exploring opportunities to leverage our fixed wireless network in urban markets to provide other wireless technology solutions and services.  Over the past few years, a significant increase in mobile data generated by smartphones, tablets, and other devices has placed tremendous demand on the networks of the carriers.  The Company believes that the wireless communications industry is experiencing a fundamental shift from its current, macro-cellular architecture to hyper-densified Small Cell architecture where existing cell sites will be supplemented by many smaller base stations operating near street level.  The Company also believes that Wi-Fi will be an integral component of Small Cell architecture.

Page 8 of 9

We have effectively transferred certain assets to Hetnets which is the operating entity for our shared wireless infrastructure segment. Hetnets plans to generate the majority of its revenue from (i) rental of space on street level rooftops for the installation of customer owned Small Cells which includes Wi-Fi antennae, DAS, and Metro and Pico cells, (ii) rental of a channel on Hetnets’ Wi-Fi network for the offloading of mobile data, (iii) rental of cabinets, switch ports, interconnection services, including backhaul or transport, and (iv) rental of power and power backup. 

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 small cell 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 CONTACTS:

Terry McGovern

Vision Advisors

415-902-3001

mcgovern@visionadvisors.net

Monica Gould

The Blueshirt Group

212-871-3927

monica@blueshirtgroup.com

MEDIA CONTACT:

Todd Barrish

Indicate Media
646-396-6038

todd@indicatemedia.com

Page 9 of 9