** **

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**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**

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**FORM 10-Q**

**x QUARTERLY REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended May 31, 2004ORo TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIESEXCHANGE ACT OF 1934For the transition period from ________ to ________**

**Commissionfile number: 0-1460**

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**MOSCOW CABLECOM CORP.**(Exact name of Registrant as specified in its charter)
| **DELAWARE**                                                                               | **06-0659863**                        |
|--------------------------------------------------------------------------------------------|---------------------------------------|
| (State  or other jurisdiction of incorporation or organization)                            | (I.R.S.  Employer Identification No.) |
|                                                                                       |                                  |
| **405 Park Avenue, New York, New York**                                                    | **10022**                             |
| (Address  of principal executive offices)                                                  | (Zip  Code)                           |
|                                                                                       |                                  |
| **          (212) 826-8942**                  |
|       (Registrant's  telephone number, including area code)  |

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               Indicate by check mark whether the registrant (1) has filed all reports requiredto be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes x No o Indicateby check mark whether the registrant is an accelerated filer (as defined inRule 12b-2 of the Exchange Act).  Yes o  No xThenumber of shares of the Registrant's $.01 par value common stock outstanding atJuly 13, 2004 was 8,538,970.
|  |  |
|--|--|
|  |  |

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**MOSCOW CABLECOM CORP.FORM 10-QTABLEOF CONTENTS**

Page No.

Part I.      Financial  Information

 

Item 1:    Financial  Statements:

 

                 Consolidated  Condensed Balance Sheets as of May 31, 2004 (unaudited) and February 29, 2004

3

                 Consolidated  Condensed Statements of Operations for the Three Months Ended May 31, 2004 and 2003 (unaudited)

4

                Consolidated  Condensed Statements of Cash Flows for the Three Months Ended May 31, 2004 and 2003 (unaudited)

5

                 Notes  to Consolidated Condensed Financial Statements (unaudited)

6

 

Item 2:    Management's  Discussion and Analysis of Financial Condition and Results of Operations

10

 

Item 3:    Quantitative  and Qualitative Disclosures About Market Risk

15

 

Item 4:    Controls  and Procedures

16

 

Part II.  Other  Information

 

 

Item 1:    Legal  Proceedings

16

Item 6:    Exhibits  and Reports on Form 8-K

16

 

Signatures

18

 

 

2
**Part I.  Financial InformationItem 1.  Financial Statements**

MOSCOW CABLECOM CORP.Consolidated Condensed Balance Sheets(In thousands, except per share data)

May 31, 2004

February 29, 2004
   
(unaudited)   
 

**ASSETS**

Current assets:

Cash and cash equivalents

$          2,980 

$           3,240

Marketable securities 

1,779 

2,897

Accounts and other receivables, less allowance for  doubtful accounts of $38 and $40, respectively

  147 

  124

Inventories  

775 

793

Taxes receivable

1,402 

1,396

Prepaid expenses and other current assets

391 

154
         
Total current assets

7,474 

8,604

Property, plant and equipment, net 

13,557 

13,552

Construction in progress and advances

5,784 

5,209

Prepaid pension expense

4,797 

4,754

Intangible assets and goodwill

- 

10,071

Intangible assets, net (Note 2)

5,911 

-

Goodwill (Note 2)

4,493 

-

Investment in Institute for Automated Systems (Note 3)

7,762 

7,894

Other assets

711 

448
         
Total assets

$         50,489 

$         50,532
         
**LIABILITIES AND STOCKHOLDERS' EQUITY**

 

 

Current liabilities:

 

 

Current maturities of long-term debt  

$              598 

 $              598

Payable to affiliate 

2,221 

1,824

Accounts payable

1,288 

880

Accrued liabilities  

1,426 

1,565

Deferred income taxes (Note 4)

614 

614
         
Total current liabilities

6,147 

5,481

Long-term debt, less current maturities  

2,900 

2,941

Other long-term obligations

890 

625

Deferred income taxes (Note 4) 

3,945 

4,063
         
Total liabilities

13,882  

13,110
         
Commitments and contingencies 

 

 

Stockholders' equity:

 

 

Cumulative convertible preferred stock, no par value;  authorized 800,000  shares; 150,229 shares and 188,006  shares issued and outstanding,   respectively; liquidation  preference $18.75 per share (Note 6)

  2,794 

  3,497

Common stock, $.01 par value; authorized 15,000,000  shares; issued and  outstanding 8,538,970 shares and  8,430,335 shares respectively

  85 

  84

Additional paid-in capital

34,037 

33,350

Retained earnings (accumulated deficit)

(309)

491
         
Total stockholders' equity

36,607 

37,422
         
Total liabilities and stockholders' equity

$         50,489 

$           50,532
         
The accompanying notes are anintegral part of these consolidated condensed financial statements. 

3
MOSCOW CABLECOM CORP.Consolidated Condensed Statements of Operations(In thousands, except per share data)(unaudited)

            Three  Months Ended

May 31, 2004

May 31, 2003

 

 

Sales and  revenues

 

 

 Subscription fees

$           1,091 

- 

 Connection fees  and equipment sales

109 

- 

 Other

178 

- 
         
Total revenue

           1,378 

             89 
         
Cost of sales

 

 

 Services from  related party

297 

- 

 Salaries and  benefits

301 

- 

 Depreciation and  amortization

303 

- 

 Other

249 

- 
         
Total cost of sales

1,150 

- 
         
Gross margin

228 

- 
         
Operating expenses

 

 

 Salaries and  benefits

761 

119 

 Depreciation

119 

58 

 General and administrative

814 

708 
         
 Total operating  expenses

1,694 

885 
         
Loss from operations

(1,466)

(885)

 

 

Equity in losses of Institute for Automated  Systems

(132)

- 

Equity in losses of Moscow Broadband Communication Ltd.

- 

(174)

Investment income and other income

332 

610 

Interest expense

(60)

(57)

Foreign currency translation (loss)

(7)

- 
         
Loss before income taxes

(1,333)

(506)

Income tax benefit

67 

93 

Losses of subsidiaries prior to  consolidation

525 

- 
         
Net loss

(741)

(413)

Preferred dividends

(59)

(71)
         
Net loss applicable to common shares

$           (800)

$           (484)
         
***Earnings per common share:***

 

 

Basic and diluted (Note 5)

$          (0.09)

$          (0.23)
         
The accompanying notes are an integral part of these consolidatedcondensed financial statements.

4

MOSCOW CABLECOM CORP. Consolidated Condensed Statements of Cash Flows(In thousands)(unaudited)

 

               Three Months Ended

 

May 31, 2004

May 31, 2003
         
***Cash flows from operating activities:***

 

 

Net (loss) 

$         (741)

$           (413)

 

 

*Adjustments to reconcile net  income to net cash provided by (used in)  operating activities:*

 

 

Losses of subsidiaries prior to  consolidation

(525)

- 

 Equity in losses of Institute for Automated Systems

132 

- 

 Equity in losses of Moscow Broadband Communication Ltd.

- 

174 

 Depreciation and amortization

425 

58 

 Stock-based compensation

150 

- 

 Deferred income taxes

(77)

206 

 Pension income 

(43)

(42)

 Net  gains from marketable securities

(68)

(456)

 

 

*Changes in operating assets  and liabilities:*

 

 

 Accounts and other receivables

(23)

13 

 Inventories

18 

- 

 Prepaid expenses and other assets

(371)

(73)

 Accounts payable and payables to affiliates

805 

(2)

 Accrued liabilities and other long-term obligations

4 

    (400)
         
    Net cash (used in) operating activities

(314)

    (935)
         
***Cash flows from investing activities:***

 

 

 Investment in ComCor-TV

- 

(3,500)

 Purchases of property and equipment

(853)

          - 

 Purchases of marketable securities

(386)

- 

 Proceeds from sales of marketable securities

1,572 

- 
         
    Net cash provided by (used in) investing activities

333

(3,500)
         
***Cash flows from financing activities:***

 

 

 Principal payments on long-term debt 

(41)

- 

 Redemption of preferred stock

(165)

- 

 Preferred dividends paid 

(73)

      (71)
         
    Net cash used in financing activities

(279)

      (71)
         
    Net decrease cash and cash equivalents

(260) 

(4,506)

 

 

 

    Cash and cash equivalents - beginning of period

3,240 

   6,279 
         
    Cash and cash equivalents - end of period

$             2,980 

$         1,773 
         
The accompanying notes are an integral part of these consolidatedcondensed financial statements.

5

MOSCOW CABLECOM CORP.Notes to Consolidated Condensed Financial Statements (unaudited)

(1)          Accounting Policies

The accompanyingunaudited interim financial statements and related notes should be read inconjunction with the audited Consolidated Financial Statements of MoscowCableCom Corp. (the "Company") and related notes as contained in theAnnual Report on Form 10-K for the fiscal year ended February 29, 2004.  The accompanying unaudited condensedconsolidated financial statements have been prepared in accordance with U.S.generally accepted accounting principles and reflect all adjustments(consisting only of normal recurring adjustments) and accruals necessary in thejudgment of management for a fair presentation of such statements.  The condensed consolidated statements ofoperations for the interim periods are not necessarily indicative of theresults for a full fiscal year.  

The Company anticipatesthe need for additional financing to support its current operations.  Currently, the Company has commitments fromexisting shareholders for an additional $2.1 million of funding if externalfinancing is not obtained to fund the Company's current operations and believesthis amount will be sufficient to finance the current level of operations forthe next 12 months.

The strategy andbusiness plan of ComCor-TV, the Company's wholly-owned subsidiary ("CCTV"),will continue to require capital investment, which the Company may not be ableto obtain on favorable terms or at all. If the Company is not able to attract additional capital, the build outof CCTV's access network would not proceed as currently planned, which wouldsignificantly limit the ability for CCTV to increase its revenues and achieveprofitability.  If the Company failed toobtain capital necessary to fund its business plan, CCTV would have to delay, changeor abandon market opportunities.  CCTVexpects to incur significant capital expenditures in FY05 and futureyears.  The actual amount of the fundsrequired to finance CCTV's network build-out and other capital expenditures infuture periods may vary materially from management's estimates.  The Company and CCTV also may requiresubstantial additional capital for the development of new services and networkcapacity expansion.  If the Company andCCTV were unable to finance their capital commitments through cash fromoperations and external financing, there would be a material adverse effect onCCTV's financial condition and results of operations.

*Consolidation*The Company hasconsolidated the accounts of all its wholly-owned and majority-owned subsidiaries.  The Statement of Operations for each of CCTVand Moscow Broadband Communication Ltd ("MBC") have been consolidated on a twomonth lag basis, but their results for the period from January 1, 2004 toFebruary 24, 2004 (the date on which they were acquired by the Company) havebeen excluded to the extent that the Company did not have a direct or indirectequity interest in their results prior to the acquisition.  This adjustment has been reflected as"Losses of subsidiaries prior to consolidation".

*Recently Issued Accounting Standards*In December 2003, the Financial Accounting Standards Board (the "FASB")issued Statement of Accounting Standard ("SFAS") No. 132 (revised 2003),"Employers' Disclosures about Pensions and Other Postretirement Benefits." ThisStatement changes the disclosure requirements for pension plans and otherpost-retirement benefit plans. It does not change the measurement orrecognition of those plans required by SFAS 87, *Employers' Accounting forPensions*, SFAS 88, *Employers' Accounting for Settlements andCurtailments of Defined Benefit Pension Plans and for Termination Benefits*,or SFAS 106, *Employers' Accounting for Postretirement Benefits Other ThanPensions*. This Statement requires additional disclosures to those requiredin the original SFAS 132 about the assets, obligations, cash flows, and netperiodic benefit cost of defined benefit pension plans and otherpost-retirement benefit plans. SFAS 132 requires that information be providedseparately for pension plans and for other post-retirement benefit plans. SFAS132 is effective for annual financial statements with fiscal years ending afterDecember 15, 2003, and for interim periods beginning after December 15, 2003.The Company has adopted SFAS 132 and provided the interim period disclosurerequirements for the period ended May 31, 2004. The adoption of SFAS 132 didnot have any impact on the Company's operating results or financial position.

In December 2003, the FASB published a revision to FinancialInterpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities"("FIN 46R") to clarify some of the provisions of FIN 46, and to exempt certainentities from its requirements. Under the new guidance, there are new effectivedates for companies that have interests in structures that are commonlyreferred to as special-purpose entities. The rules are effective in financialstatements for periods ending after March 15, 2004. FIN 46R did not have anyimpact on the Company's operating results or financial position because theCompany does not have any variable interest entities.

6
*Stock-based Compensation Plans*The Company follows Accounting Principles Board Opinion No. 25,"Accounting for Stock Issued to Employees" and relatedInterpretations, in accounting for its stock-based compensation plans and haselected to continue to use the intrinsic value-based method to account forstock option grants.  The Companyadopted the disclosure-only provisions of SFAS No. 148 ("SFAS 148"),"Accounting for Stock-Based Compensation - Transition andDisclosure", an amendment of Statement of Financial Accounting StandardsNo. 123 ("SFAS 123"). Accordingly, no compensation expense has been recognized for theCompany's stock-based compensation plans. Had we elected to recognize compensation expense based upon the fairvalue at the grant dates for awards under these plans, net income and loss pershare would have been unchanged from amounts as presented because the Companyhas not granted any stock based compensation awards since FY01.

(2)          IntangibleAssets and Goodwill

In May 2003, the Company enteredinto agreements with COMCOR in which the Company agreed to acquire control over100% of the outstanding stock of CCTV through i) the contribution of cash intoCCTV, of which $3.5 million was made in May 2003; ii) the issuance of 4,220,879shares of its Common Stock in exchange for the shares of CCTV held by or to beacquired by COMCOR; and iii) the issuance of 2,250,000 shares of its CommonStock in exchange for the 75% of MBC not previously owned by the Company.  On February 24, 2004, the Company issued4,000,000 shares of its Common Stock to COMCOR and 2,250,000 shares of itsCommon Stock to the shareholders of MBC to acquire control over all the outstandingequity of CCTV.  The Company expects toissue an additional 220,879 shares of its Common Stock to COMCOR once theappropriate Russian regulatory approvals are received to facilitate thesettlement of approximately $1,380,000 of CCTV's liabilities to COMCOR throughthe issuance of CCTV stock to COMCOR, that, in turn, COMCOR will exchange withthe Company for its Common Stock in accordance with the agreements.

The consideration for theacquisition of CCTV and MBC has been valued at $30.7 million which includes thecash contribution of $3.5 million in May 2003 and $27.2 million representingthe value of shares of Common Stock issued and committed to be issued basedupon the market price of $4.21 per share for the Company's Common Stock at thetime the agreements were reached and announced in May 2003. The purchase pricehas been allocated to the $12.2 million to the net assets of CCTV, $7.9 millionto CCTV's 43.5% equity interest in the Institute for Automated Systems ("IAS")and $10.6 million related to intangible assets and goodwill on the transaction.

SFAS No. 141 requires that thepurchase method of accounting be used for all business combinations initiatedafter June 30, 2001.  SFAS No. 141 alsospecifies criteria that intangible assets acquired in a purchase methodbusiness combination must meet in order to be recognized and reported apartfrom goodwill.  SFAS No. 142 requiresthat goodwill and intangible assets with indefinite useful lives no longer beamortized, but instead be tested at least annually for impairment.

The Company's agreement with COMCOR, pursuant to whichCOMCOR provides signal delivery and other services from its fiber optic networkto CCTV, has been concluded at rates more favorable to the Company than currentmarket terms.  Accordingly, the Companyhas recorded an intangible asset related to the economic savings associatedwith this relationship.    Although thisagreement does not expire until 2053, the Company believes that obsolescence,demand, competition, and other economic factors limit the usefulness of thethese agreements and, accordingly, the relationship is being amortized over auseful life of 10 years based on the consideration of the aforementionedfactors.

CCTV'slicenses to provide television broadcast services have been determined to havea finite life of 10 years based upon the expectation of obsolescence, demand,competition, and other economic factors that limit the useful life of theasset.  

For thefirst quarter of FY05, the Company recorded $151,000 of amortization related tothe COMCOR agreement and broadcast license assets.  Over each of the next five years, the Company expects torecognize annual amortization of approximately $604,000 related to theseintangible assets.

Goodwill recorded in connection with the acquisition of CCTVrepresents the excess of the acquisition price over the currently estimatedfair value of the identified tangible and intangible assets of CCTV.  In accordance with SFAS 142, goodwill is notbeing amortized and will be tested for impairment at least annually. The impairmenttest involves a comparison of the fair value of its reporting unit as definedunder SFAS No. 142, with carrying amounts. If the reporting unit's aggregated carrying amount exceeds its fairvalue, then an indication exists that the reporting unit's goodwill may beimpaired.  The impairment to berecognized is measured by the amount by which the carrying value of thereporting unit being measured exceeds its fair value, up to the total amount ofthe assets.

7
At February 29, 2004, the allocation of the purchase pricehad not been finalized and accordingly the composition of intangible assets wasnot available.  This allocation processhas since been completed, and accordingly, at May 31, 2004, the Company's intangibleassets were comprised as follows (in thousands).
Agreement with COMCOR$        3,490 Broadcasting licenses
2,572 Less accumulated amortization6,062   Intangible assets, net(151)   $        5,911   
(3)**          **Investment in InstituteFor Automated SystemsIAS is a telecommunications company that operates a data communications networkin Russia. As a result of the acquisitions of CCTV and MBC in February 2004,the Company has a 43.5% equity interest in IAS, which it records on a two-monthlag basis consistent with the accounting for each of CCTV and MBC. For thethree months ended May 31, 2004, the Company recorded $132,000 as its equity inIAS's losses for the three months ended March 31, 2004.

The Company's investment in IAS isrecorded at $7,762,000 as compared to 43.5% of IAS's equity which is$3,032,000.  The difference is due tothe valuation of IAS as part of the process to allocate the purchase price forthe acquisition of CCTV and MBC.  

The following presents the summarized financial condition of IAS asof March 31, 2004 and the results of its operations for the three months thenended (in thousands):

**Balance Sheet**

 

**March 31, 2004**
         
 Current assets

 

$               1,547 

 Non-current assets

9,141 
         
     Total assets

 

$            10,688 
         
 Current liabilities

$               1,859 

 Non-current liabilities

 

1,860 
         
     Total liabilities

      

3,719 
         
     Shareholders' equity

                 

$               6,969 
         
             

$            10,688 
         **Statement of Operations**
**Three months ended   March 31, 2004**
    
Revenues

$              1,294 

Cost of revenues

(1,045)

Operating expenses

(397)
      
Loss from operations

(148)

Foreign currency  transaction loss

(84)

Interest expense

(71)

Income tax expense

- 
      
Net loss

$               (303)
      
8
(4)          Income Taxes

Income tax benefitrepresents an estimate of the effective income tax rate for the current fiscalyear after considering valuation allowances with respect to the Company'sability to realize tax benefits from its operating losses and its equity in thelosses of IAS.

(5)          Loss Per Share

Loss per share is computedbased on the weighted average number of common and common equivalent sharesoutstanding.  Diluted earnings per shareassumes full conversion of all convertible securities into common stock at thelater of the beginning of the year or date of issuance, unlessantidilutive.   For the three monthsperiods ended May 31, 2004 and 2003, the assumed conversion of the Company'sconvertible securities had antidilutive effects on the Company's earnings per share.

                                               Three Months Ended  May 31,
   20042003         
Calculation  of basic loss per share

 

 

 

 

Numerator for basic  and diluted loss per share:

 

 

Net loss

$      (800)

$        (484)
         
Denominator for basic  loss per share:

 

 

Weighted average  number of shares outstanding during the period

8,448 

2,100 

Effect of dilutive  securities

- 

- 
         
Denominator for  diluted loss per share

8,448 

2,100 
         
Basic loss per share

$    (0.09)

$       (0.23)
         
Diluted loss per share

$    (0.09)

$       (0.23)
         
(6)           PreferredStockIn April 2004, the Company called for the redemption of 35,000 shares, orapproximately 18.6%, of the outstanding shares of its Preferred Stock with aredemption date, as extended, of May 14, 2004. As a result of the redemption and voluntary conversions of the PreferredStock into Common Stock in lieu of redemption, 8,761 shares of Preferred Stockwere redeemed and 29,016 shares of Preferred Stock were converted into 88,635shares of the Company's Common Stock. At May 31, 2004, 150,229 shares ofPreferred Stock remain outstanding.

(7)          RetirementPlans

The Company maintains a non-contributory defined benefitplan and a defined contribution plan which collectively cover substantially allfull-time employees.  The definedcontribution plan is funded through employees' contributions and employer'smatching contributions.  Pension expensefor the Company's defined contribution plan totaled $5,000 and $0 for the threemonths ended May 31, 2004 and May 31, 2003, respectively.

The projected benefit obligations were determined using thefollowing assumptions:

2004 

2003 
         
Discount rate

6.00%

6.50%

Future compensation growth rate

5.00%

5.00%

Long-term rate of return on plan assets

8.00%

8.00%
         
The required use of expected long-term rate of return onplan assets may result in recognized pension income that is greater or lessthan the actual returns of those plan assets in any given year.  Over time, however, the expected long-termreturns are designed to approximate the actual long-term returns and thereforethe pattern of income and expense recognition will more closely match thepattern of the services provided by the employees.  Differences between actual and expected returns are recognized inthe calculation of net periodic pension cost or (income) over five years asprovided for in the accounting rules.

9
These expected returns on plan assets take into accountlong-term expectations for future returns and investment strategy.

The discount rate assumptions used for pension benefit planaccounting reflects the prevailing rates available on high-quality,fixed-income debt instruments.  The rateof compensation increase is another significant assumption used in theactuarial model for pension accounting and is determined by the Company basedupon its long-term plans for such increases.

                                                                     Three  Months Ended May 31,

2004

2003
         
Components of periodic benefit cost:

 

 

Service cost of benefits accrued

$         6 

$        7 

Interest cost on projected benefit obligations

205 

203 

Expected return on plan assets

(281)

(277)

Amortization of unrecognized actuarial losses

27 

25 
         
Net periodic benefit gain

$     (43)

$    (42)
         
The Company has not madeany contributions to the defined benefit plan since the plan was acquired inFY91 as part of the acquisition of JM Ney, and it expects that it will not berequired to make any contributions during FY05.

(8)                Commitments and ContingenciesAt May 31, 2004, theCompany remains obligated to issue 220,879 shares of its common stock to COMCORas settlement of $1,380,000 of liabilities to COMCOR to occur in accordancewith terms of the agreements which resulted in the Company acquiring COMCOR'Sequity interest in CCTV.  The Companyexpects that this transaction will be completed before the end of the currentfiscal year.

**Item 2.  Management's Discussionand Analysis of Financial Condition and Results of Operations**

The accompanyingManagement's Discussion and Analysis of Financial Condition and Results ofOperations ("MD&A") should be read in conjunction with theMD&A in the Company's Report on Form 10-K for the year ended February 29,2004.

OverviewThe Company is a holdingcompany which on February 24, 2004, completed the acquisition of 100% of CCTV,a Russian company that delivers cable television, high speed data transmissionand Internet services to its customers in Moscow, Russia.  CCTV is an early stage business that iscurrently expanding its network and attempting to increase its customerbase.  Prior to February 2004, theCompany had an indirect equity interest in CCTV through its 25% equity interestin Moscow Broadband Communication Ltd. ("MBC"), which in turn held 50% votingcontrol over CCTV.  As an integralcomponent of the acquisition of CCTV, the Company also acquired the 75% of MBCthat it did not previously own.The Company also has a trading portfolio of equity investments of domestic andforeign-based companies, which at May 31, 2004 was valued at $1,779,000.Due to the recent acquisition of CCTV, the current year information is notcomparative with prior year information. We have incorporated certain historical operating results of CCTV intoour discussion to assist in the analysis and evaluation of our results.

Critical AccountingPolicies and EstimatesThe MD&A discusses the Company's consolidated financial statements, whichhave been prepared in accordance with accounting principles generally acceptedin the United States.  The preparation of these financial statementsrequires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and the disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts ofrevenues and expenses during the reporting period.  On an on-going basis,management evaluates its estimates and judgments, including those related to baddebts, investments, income taxes, financing operations, retirement benefits, andcontingencies and litigation.  Management bases its estimates and judgmentson historical experience and on various other factors that are believed to bereasonable under the circumstances, the results of which form the basis formaking judgments about the carrying values of assets and liabilities that arenot readily apparent from other sources.  Actual results may differ fromthese estimates under different assumptions or conditions.

10
Management believes the following critical accountingpolicies, among others, affect its more significant judgments and estimatesused in the preparation of its consolidated financial statements:  

Revenue RecognitionRevenue is primarily derived from the sale of cabletelevision and Internet services to subscribers and is recognized in the periodthe related services are provided. Under SAB 101, the Company defers connection fees, set-top sales andrelated costs, and recognizes them over a five-year period, which representsthe estimated customer relationship period. The Company follows the guidance of FASB 51 in recognizing initialconnection revenues and direct selling costs. All revenue figures are recorded net of value-added taxes.

Doubtful AccountsThe Company maintains allowances for doubtful accounts forestimated losses resulting from the inability of the Company to collect amountsdue from others.

Prepaid Pension ExpenseThe Company accounts for its defined benefit pension plan inaccordance with SFAS No. 87, "Employers' Accounting for Pension Plans", whichprovides for the delayed recognition of actuarial gains and losses that arisefrom differences between actual results of the plan from the actuariallycalculated results based on several factors including employee mortality andturnover, investment return on plan assets and the discount rates used torecord the present value of the obligations of the plan.  To the extent that unrecognized gains orlosses exceed 10% of the greater of the plans projected benefit obligation orthe market value of its assets, such excess is amortized over the estimatedremaining service period for active employees. The Company considers and adjusts the various assumptions utilized inthe calculations such as the discount rate, future compensation growth rate andthe long-term rate of return on plan assets, as market conditions warrant.

ConsolidationFor the three months ended May 31, 2004, the Company'sconsolidated results of operations include the results of each of CCTV and MBCfor the three months ended March 31, 2004. However, their results of operations from January 1, 2004 to February24, 2004 have been excluded to the extent that the Company did not have a priordirect or indirect equity interest in their results.  Such exclusion has been reflected as "Losses of subsidiariesprior to consolidation" on the Company's consolidated statements of operations.

Valuation of Long-Lived AssetsLong-lived assets such as property, plant, and equipment andacquisition-related intangible assets are reviewed for impairment wheneverevents or changes in circumstances indicate that the carrying amount may not berecoverable. For assets the Company intends to hold for use, if the total ofthe expected future undiscounted cash flows is less than the carrying amount ofthe asset, a loss would be recognized for the difference between the fair valueand carrying value of the asset. For assets the Company intends to dispose ofby sale, a loss would be recognized for the amount that the estimated fairvalue, less costs to sell, is less than the carrying value of the assets. TheCompany periodically evaluates the useful lives of its property, plant, andequipment based on changes in technology, current business developments, andother industry conditions. It is reasonably possible that these assets couldbecome impaired as a result of these factors. 

Valuation of GoodwillIn accordance with SFAS No. 142, the Company completesan impairment test of goodwill annually, or more frequently if an event occursor circumstances change that would more likely than not reduce the fair valueof our business enterprise below its carrying value. The impairment testrequires the Company to estimate the fair value of our overall businessenterprise. In the absence of a current transaction for the sale of ourbusiness enterprise, we believe a discounted cash flow (DCF) model, ratherthan the market price of our common stock is the best technique with which toestimate the fair value of our business enterprise.  The Company has determined that we have one reporting unit forpurposes of testing goodwill, and therefore, the DCF model is largely afunction of the cash flows of the business enterprise.

11
Deferred Tax AssetsThe Company records a valuation allowance to reduce itsdeferred tax assets to the amount that it believes is more likely than not tobe realized. The Company considers future taxable income and ongoing prudentand feasible tax planning strategies in assessing the need for the valuationallowance.  When the Company determinesthat it may not be able to realize all or part of its net deferred tax assets,a valuation allowance to reduce the deferred tax assets to estimatedrecoverable amounts is charged to income in the period such determination ismade.  Likewise, should the Companydetermine that it would be able to realize its deferred tax assets in thefuture in excess of its net recorded amount, a reduction in the valuationallowance would increase income in the period such determination is made. 

RESULTS OF OPERATIONS- THREE MONTHS ENDED MAY 31, 2004 VS. THREE MONTHS ENDED MAY 31, 2003

For the three monthsended May 31, 2004, the Company reported net loss applicable to commonshareholders of $800,000, or $0.09 per share, as compared to a loss of $484,000or $0.23 per share for the three months ended May 31, 2003.  The results are not comparable, as thecurrent quarter reflects the full consolidation of CCTV's results ofoperations, while the prior year's results included the Company's indirect12.5% interest in CCTV's results arising from the Company's use of the equitymethod of accounting for the investments. In addition to CCTV's operating progress, the effects of purchaseaccounting have generally resulted in lower amounts of depreciation andamortization than had been reported by CCTV due to the fact that a substantialportion of the carrying value of CCTV's assets were reduced based on their fairvalue at the date of acquisition in 2004. The per share results in the current quarter reflect the increase in theCompany's outstanding shares, primarily as the result of the shares of common stockissued in February 2004 to enable the acquisition of CCTV and MBC.  The per share amounts do not include theeffects of the additional 200,879 shares of common stock that will be issuedpursuant to the terms of the acquisition agreements, and which shares areexpected to be issued before the end of the current fiscal year.

Subscription RevenueFor the three months ended May 31, 2004, the Companyrecorded $1,091,000 of revenues for its cable television and Internet accessservices.   The Company did notconsolidate CCTV's results in the prior year, but the change from the prioryear is as follows:

 

                                         Three Months Ended

 
         
May 31, 2004

May 31, 2003

Change
            
Television services

$              340

$             167

103.6%

Internet access services

751

355

111.5%
            
$           1,091

$             522

109.0%
            
Television revenues increased as subscribers for itsterrestrial broadcasting television increased to 58,296 as of March 31, 2004,which is an increase of 26.9% from the 45,934 subscribers reported as of March31, 2003.   In addition, subscribers ofpremium television services increased 92.2% from 3,576 at March 31, 2003 to6,873 at March 31, 2004.  Theterrestrial and premium subscriber growth represent increases of 3.4% and 32.6%respectively, from December 31, 2003 levels. The subscriber amounts include inactive subscribers, or subscribers whohad not paid for services in the months being reported, which for terrestrialservices averaged approximately 3.2% and 2.9% during the three month periodsended March 31, 2004 and 2003, respectively, and for premium televisionservice, inactive accounts averaged approximately 30.5% and 21.5% of reportedtotal subscribers, respectively, during these periods.

The subscriber growth was accomplished from sales in areasof Moscow that were newly accessed since March 31, 2003 and from increasedmarket penetration in areas to which the Company had previously accessedthrough its hybrid co-axial fiber network which provides the "last mile" accessfrom the fiber optic network which the Company leases to the homes.  At March 31, 2004, the Company had marketpenetration for its terrestrial and premium television services of 34.8% and4.1%, respectively, as compared to market penetration of 36.8% and 2.9%,respectively, at March 31, 2003.  AtMarch 31, 2004, the number of homes passed totaled 167,348 as compared to124,987 as of March 31, 2003.

Internet access service revenue increased due to increasesin the number of subscribers for these services.  At March 31, 2004, there were 11,893 reported subscribers forInternet access services, which is an increase of 96.6% from the 6,048subscribers reported a year earlier and an 18.8% increase during the quarterfrom the December 31, 2003 subscriber count of 10,015.  The subscriber amounts include inactivesubscribers, which averaged approximately 22.4% during the three months endedMarch 31, 2004, as compared to an average inactive level of approximately 16.0%during the three months ended March 31, 2003. Market penetration of Internet services was approximately 7.1% of the167,348 homes passed at March 31, 2004, as compared to market penetration of4.2% of the 124,987 homes passed at March 31, 2003.

12
Connection fees and equipment salesFor the three months ended May 31, 2004, the Companyrecorded $109,000 of connection fees and installation revenue.  The Company did not consolidate CCTV'sresults in the prior year, but the current year revenue levels represent adecrease of $68,000 or 38.4% as compared to the $177,000 of revenues recognizedby CCTV during the three months ended March 31, 2003.  The lower revenue relates to the significant discount on set topboxes for premium television subscribers that were given during the period aspart of sales promotions.  

Other revenueFor the three months ended May 31, 2004, the Companyrecorded $178,000 of other revenue from CCTV of which approximately $129,000relates to revenues from ComCor due to CCTV's participation as a subcontractorin a City of Moscow build-out program in the Zelenograd region.

Other revenues also includes approximately $79,000 of rentalincome, $48,000 of ultrasonic royalty income. 

Cost of salesCost of sales for the three months ended May 31, 2004totaled 1,150,000 or 83.5% of total revenue to produce gross margin of$228,000.  The Company did notconsolidate CCTV's results of operations in the prior year, but CCTV did reportcost of sales for its first quarter of the prior year of $1,179,000.  The prior year results include approximately$268,000 of amortization of intangible assets as compared to $151,000 for thecurrent year's first quarter.  All othercomponents increased approximately $88,000 due to increased costs for lease ofsecondary nodes from COMCOR and costs associated with the Zelenograd build-outprogram.

Operating expensesOperating expensestotaled $1,694,000 during the three months ended May 31, 2004.  For the three months ended May 31, 2003, theCompany recorded $885,000 of expenses, but this amount is not readily comparablebecause of the acquisition of CCTV and MBC. Corporate-level expenses during the quarter totaled $677,000 whichrepresents a decrease of $208,000 from the prior year costs.  Lower professional fees, which had beenincurred in the prior year relating to the negotiation and documentation of theagreements leading to the acquisition of CCTV, accounted for most of thedifference.  In addition, in the currentyear, the Company incurred salary expenses that were formerly paid by MBC, butsuch increases were substantially offset by lower costs associated with thevaluation charges of deferred compensation accounts for certain executives.

CCTV incurred $1,015,000of operating expenses in its first quarter which compares to $796,000 for itscomparable quarter in the prior year. Increased salaries, professional fees and costs associated with the TVguide designed to better market the Company's premium television servicesaccounted for the increase in costs.

Equity in losses ofIASFor the three monthsended May 31, 2004, the Company recorded a $132,000 expense as its equity inthe losses of IAS.  This represents43.5% of IAS's losses of $303,000 for the three months ended March 31, 2004.  For the prior year, the Company did notconsolidate CCTV's results of operations, but CCTV did record its 41.7% equityinterest in IAS's losses which totaled $134,000 for the three months endedMarch 31, 2003.  MBC owned only 1.8% ofIAS and did not utilize equity accounting in the prior year.  IAS's losses increased primarily due to$70,000 of interest expense on a bank loan, an increase in foreign currencytransaction losses and increased personnel costs.

Investment income and other incomeFor the three monthsended May 31, 2004, investment income and other income totaled $332,000 ascompared to $610,000 in the comparable period in the prior fiscal year.  Significant components of investment incomeand other income are as follows (in thousands):

13
                                                            Three Months  Ended
      
May  31, 2004

May  31, 2003
         
Net gains from  domestic trading portfolio

$               68 

$             456 

Rental income

79 

76 

Interest and dividends

13 

20 

Ultrasonic royalties

48 

13 

Change in deferred  compensation accounts

(14)

45 

Precious metals  recovery

138 

- 
         
 $            332 

$             610 
         
The recovery of thevalue of precious metals relates to the Company's former Electronics segmentwhich used outside refiners to process its precious metal scrap.

Interest expenseInterest expense totaled$60,000 for the three months ended May 31, 2004 which is a $3,000 increase fromthe $57,000 of interest recorded in the comparable period of the prior fiscalyear.  The lower interest resulting fromprincipal payments on the Company's 10 1⁄2% subordinated debentures was more thanoffset by the interest expense of a $2 million mortgage which was closed in thesecond quarter of the prior fiscal year.

Income tax benefitIncome tax benefit hasbeen accrued based upon the estimated effective tax rates for the fiscal year,after considering valuation allowances related to the Company's ability torealize such tax benefits.  

Losses ofsubsidiaries prior to consolidationFor the three monthsended May 31, 2004, the Company has added back the net losses of each of CCTVand MBC to the extent that it did not have a direct or indirect equity interestin these entities from January 1, 2004 to the date of their acquisition,February 24, 2004.

Preferred dividendsPreferred dividendsduring the three months ended May 31, 2004 totaled $59,000 as compared to$71,000 of dividends in the first quarter of the prior fiscal year.  The reduction reflects the effects ofredemption and conversion of a total of 37,777 shares of the Preferred Stock.

LIQUIDITY AND CAPITALRESOURCES

During the quarter endedMay 31, 2004, the Company used $314,000 in its operating activities, which iscomprised of a use of cash of $747,000 in net losses as adjusted for non-cashitems, and $433,000 of cash provided by changes in operating assets andliabilities.  During the quarter, theCompany generated $333,000 from investing activities, which was comprised ofthe use of $853,000 for capital expenditures and a net of $1,186,000 of cashprovided by activities relating to the Company's short-term investment portfolio.  Financing activities used $279,000 duringthe three months ended May 31, 2004, as the Company used funds to redeem aportion of its preferred stock, pay dividends and make principal payments on areal estate mortgage loan.

At May 31, 2004, the Company'sconsolidated cash position was $2,980,000 and it had $1,779,000 in marketablesecurities.  Subsequent to the quarterend, this cash position was reduced as the Company's wholly-owned subsidiaryCCTV, further expanded its access network for the delivery of television andInternet access services.  The Companyexpects to be able to meet its operating obligations for at least the nexttwelve months and the costs of these additional capital expenditures; however,further growth in CCTV's network and the longer term ability to meet operatingexpenses and debt service requirements will be dependent on the Company'ssuccess in attracting outside sources of capital.  The Company has received commitments from certain existingshareholders for an additional $2.1 million in funding if other externalfinancing is not obtained.  The Companybelieves that such external financing can be obtained, but at this time therecan be no assurances of its ability to do so on favorable terms.

CCTV's strategy and business plan will continue torequire capital investment, which the Company may not be able to obtain onfavorable terms, or at all.  If theCompany is not able to attract additional capital, the build out of CCTV'saccess network would not proceed as currently planned, which in turn, wouldsignificantly limit the ability for CCTV to increase its revenues and achieveprofitability.  If the Company fails toobtain capital necessary to fund its business plan, CCTV would have to delay,change or abandon market opportunities. CCTV expects to incur significantcapital expenditures in FY05 and future years. The actual amount of the fundsrequired to finance CCTV's network build-out and other capital expenditures infuture periods may vary materially from management's estimate.  In addition, CCTV anticipates that it willenter into material purchase commitments in the future.  The Company and CCTV also may requiresubstantial additional capital for the development of new services and networkcapacity expansion. If the Company and CCTV were unable to finance theircapital commitments either through cash from operations or external financing,there would be a material adverse effect on CCTV's financial condition andresults of operations. The Company believes it has a reasonable basis to expectthat its efforts will be sufficiently successful to enable CCTV to continue totake advantage of the market opportunities which the Company believes exist inthe Moscow market, but there can be no assurances that it will be able to do soon favorable terms.  

 14**
*Effect of New Accounting Pronouncements*

In December 2003, the FASB issued SFAS 132 (revised 2003),"Employers' Disclosures about Pensions and Other Postretirement Benefits." ThisStatement changes the disclosure requirements for pension plans and otherpost-retirement benefit plans. It does not change the measurement orrecognition of those plans required by SFAS 87, *Employers' Accounting forPensions*, SFAS 88, *Employers' Accounting for Settlements andCurtailments of Defined Benefit Pension Plans and for Termination Benefits*,or SFAS 106, *Employers' Accounting for Postretirement Benefits Other ThanPensions*. This Statement requires additional disclosures to those requiredin the original SFAS 132 about the assets, obligations, cash flows, and netperiodic benefit cost of defined benefit pension plans and otherpost-retirement benefit plans. SFAS 132 requires that information be providedseparately for pension plans and for other post-retirement benefit plans. SFAS132 is effective for annual financial statements with fiscal years ending afterDecember 15, 2003, and for interim periods beginning after December 15, 2003.The Company has adopted SFAS 132 and provided the interim period disclosurerequirements for the period ended May 31, 2004. The adoption of SFAS 132 didnot have any impact on the Company's operating results or financial position.

In December 2003, the FASB published a revision to FinancialInterpretation No. 46 ("FIN 46"), "Consolidation of Variable Interest Entities"("FIN 46R") to clarify some of the provisions of FIN 46, and to exempt certainentities from its requirements. Under the new guidance, there are new effectivedates for companies that have interests in structures that are commonlyreferred to as special-purpose entities. The rules are effective in financialstatements for periods ending after March 15, 2004. FIN 46R did not have anyimpact on the Company's operating results or financial position because theCompany does not have any variable interest entities.

OFF BALANCE SHEETARRANGEMENTSThe Company has acontingent liability with respect to a $386,000 letter of credit issued by itsbank to secure performance bonds issued in connection with an unresolved stateincome tax matter. The Company believes that its accruals are sufficient tomeet any obligations that may arise from this matter.The Company is also party to certain operating leases which will require$92,000 of payments to be made during the remainder of FY04.

**Item 3.  Quantitative andQualitative Disclosures About Market Risk**

The Company is exposedto market risk from changes in equity security prices, interest rates and fromfactors that impact equity investments in Russia, as discussed in the Company'sAnnual Report on Form 10-K for the year ended February 28, 2003.  The following information is presented toupdate the status of the identified risks.

EQUITY SECURITY RISK

At May 31, 2004, theCompany has equity risk with respect to $1,779,000 of investments in U.S. basedpublicly traded financial institutions held in its trading portfolio.  The Company bears the risk of thefluctuations of market prices of the stock of these companies.

15
FOREIGN INVESTMENTRISKThe Company's investment in CCTV is subject to currencyfluctuations, and the economic and political risks associated with Russia. TheCompany has not entered into any derivative instruments to hedge the risksassociated with this investment. This investment also bears the risk of CCTV'sability to increase its revenues through the addition of subscribers for itscable television, high-speed data transmission and Internet services. Thesubscriber growth is largely dependent upon CCTV's ability to build-out itsaccess network from the MFON which it leases from COMCOR, which is largely dependentupon it receiving a sufficient amount of capital to pay for the equipment andconstruction costs.

INTEREST RATE RISKAt May 31, 2004,Andersen Land Corp., a wholly owned subsidiary of the Company, was liable inthe amount of $1,847,000 under a mortgage collateralized by a real estateproperty and an assignment of rental income from the lease of theproperty.  Interest under this note willfluctuate at 2.25% above the London Interbank Offered Rate (LIBOR), which willexpose the Company at each periodic renewal of the rate.  At May 31, 2004, the interest rate on thismortgage loan was 3.81%,which is scheduled to be re-set in October 2004.

**Item 4.  Controls and Procedures**(a)  Evaluation of disclosurecontrols and procedures.  The Company'sprincipal executive officer and principal financial officer have concluded thatthe Company's disclosure controls and procedures (as defined in Exchange ActRule 13a-15(e)), based on their evaluation of such controls and proceduresconducted as of the end of the period covered by this report, are effective toensure that information required to be disclosed by the Company in the reportsit files under the Securities Exchange Act of 1934, as amended, is recorded,processed, summarized and reported within the time periods specified in therules and forms of the Securities and Exchange Commission and that suchinformation is accumulated and communicated to the Company's management,including its principal executive officer and principal financial officer, asappropriate to allow timely decisions regarding required disclosure.

(b)  Changes in internal controlover financial reporting.  There hasbeen no change in the Company's internal control over financial reportingduring the last fiscal quarter that has materially affected, or is reasonablylikely to materially affect, the Company's internal control over financialreporting. **Part II.  Other Information**

**Item 1.  Legal Proceedings**

*Morton International, Inc. v. A.E. Staley Mfg. Co. et al. and VelsicolChemical Corp. v. A.E. Staley Mfg. Co. et al.*

As originally reported in the Company's Form 10-K for theyear ended February 28, 1997, in July 1996, two companion lawsuits were filedin the United States District Court for the District of New Jersey, by variousowners and operators of the Ventron-Velsicol Superfund Site("Site").  The lawsuits, whichwere subsequently consolidated, were filed under the ComprehensiveEnvironmental Resource Compensation and Liability Act ("CERCLA"), theResource Conservation and Recovery Act, the New Jersey Spill Act and New Jerseycommon law, alleging that the defendants (over 100 companies, including JM Ney)were generators of certain wastes allegedly processed at the Site.  The lawsuits seek recovery of costs incurredand a declaration of future liability for costs to be incurred by the ownersand operators in studying and remediating the Site. As further reported in the Company's Form 10-Q for the period ended November30, 2001, this case was dismissed without prejudice and the plaintiffs' abilityto reinstate their claims were limited for a minimum of three years untilOctober 2004.  If the plaintiffsreinstate the case, given the legal and factual issues that remain outstanding,the Company currently has no basis to ascertain the range of loss, should anyoccur, with respect to an outcome that may be considered unfavorable.  This contingent liability was not assumed bythe buyer of JM Ney's net assets.

*Norman D. Mass and Lois Ravage Mass v. Amchem Products,Inc. et. al. (New York State Supreme Court, County of New York, Index101931-04) and Loretta Brienza and Brent Brienza v. A.W. Chesterton Company et.al. (New York State Supreme Court, County of New York, Index 104076-04).*

As originally reported in the Company's Form 10-K for the yearended February 29, 2004, in March and April 2004, the Company's wholly-ownedsubsidiary, The J.M. Ney Company, now known as Andersen Land Corp., was servedwith a summons and a complaint in the above-captioned matters in which it andin excess of one hundred (100) other parties were named as defendantsin an asbestos related civil action for negligence and product liability filedin the Supreme Court of New York in which the Plaintiffs claim damages frombeing exposed to asbestos and asbestos products alleged to have beenmanufactured or supplied by the defendants, including JM Ney's former dentaldivision.  The plaintiffs have not provided any specific allegations offacts as to which defendants may have manufactured or supplied asbestos andasbestos products which are alleged to have caused the injuries.

TheCompany believes that it has insurance that potentially covers this claim andis in the process of notifying its insurance carriers to provide reimbursementof defense costs and liability, should any arise.  Based upon the answersto the interrogatories that have been supplied by the plaintiffs' attorneys, itdoes not appear to the Company that JM Ney manufactured the product containingasbestos that is the subject of this litigation. As of this date, the Companyhas no basis to conclude that the litigation may be material to the Company'sfinancial condition or business.  The Company intends to vigorously defendthe lawsuit.

**Item 6.  Exhibits and Reports onForm 8-K**
(a)     Exhibits  required by Item 601 of Regulation S-K:
16ExhibitDescription  31.1Certification of the    Company's Chief Executive Officer pursuant to Rule 13a-14(a).  31.2Certification of the    Company's Chief Financial Officer pursuant to Rule 13a-14(a).  32.1Certification of the    Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2Certification of the    Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as    adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 

(b)  Reports on Form 8-K

 
During the three months ended May 31, 2004, the Company  filed the following reports on Form 8-K:

On March 15, 2004, the Company  filed a Form 8-K under Items 5 and 7 to report that it had issued a press  release announcing the election of four individuals to its Board of Directors  and the resignation of one director. 

On April 5, 2004, the Company  filed a Form 8-K under Items 5 and 7 to report that it had issued a press  release announcing the redemption of 35,000 shares of its Preferred Stock. 

On April 13, 2004, the Company  filed a Form 8-K under Items 5 and 7 to report that it had issued a press  release announcing operating progress at CCTV as of March 31, 2004 in terms  of growth of the access network and increases in subscribers and revenue from  subscriber services. 

On May 10, 2004, the Company  filed a Form 8-K/A under Item 7 to report the financial information required  with respect to CCTV and MBC and financial information for the Company  reflecting its pro forma consolidated balance sheet as of November 30, 2003  and its pro forma results of operations for the year ended February 28, 2003  and the nine months ended November 30, 2003 showing the possible effects of  the acquisitions of CCTV and MBC which were consummated on February 24, 2004. 

Subsequent to May 31, 2004 the Company filed the following  reports on Form 8-K: 

On June 14, 2004, the  Company filed a Form 8-K under Items 5 and 7 to report that it had issued a  press release announcing an agreement between CCTV and NTV-Plus pursuant to  which CCTV will offer its customers premium television content offered by  NTV-Plus. 

On June 17, 2004, the  Company filed a Form 8-K under Items 7 and 12 to report that it had issued a  press release setting forth the Company's financial results for the fourth  quarter and year ended February 29, 2004 and the results of a partial  redemption of its Preferred Stock.  

On June 28, 2004, the  Company filed a Form 8-K under Items 5 and 7 to report that it had issued a  press release announcing the election of Oliver R. Grace, Jr. as its Chairman  of the Board.

17

SIGNATURES

MOSCOW CABLECOM CORP.

By:           /s/ Oliver R. Grace, Jr.

                Oliver R. Grace, Jr.

                Chairman, President and Chief  Executive Officer

Date:       July 20, 2004
   
By:           /s/ Andrew M. O'Shea

                Andrew M. O'Shea

                Chief Financial Officer

Date:       July 20, 2004

18