Internet America to merge with KeyOn Communications

Internet Business News, Nov 18, 2008

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Internet America Inc (OTCBB:GEEK) and KeyOn Communications Holdings Inc (OTCBB:KEYO) announced on 18 November that they have entered into a definitive agreement to merge in a stock-for-stock transaction, with KeyOn shareholders maintaining 45% of the merged company.

The two companies both provide wireless broadband services to residential and business customers in underserved and rural communities in the United States. Internet America also offers dial-up, DSL and related Internet services, while KeyOn also offers video satellite services through a national partnership with DISH Network Corporation. The combined entity, called Internet America, will have approximately 44,500 subscribers including approximately 23,500 wireless broadband subscribers.

When the merger is completed KeyOn shareholders will receive newly issued Internet America shares registered with the SEC equal to 45% of Internet America on a post-merger basis. Internet America shareholders will maintain a 55% ownership. As part of its conditions to closing KeyOn is required to reach a liquidity threshold by reducing or eliminating certain current liabilities combined with raising additional equity. The closing is also subject to KeyOn shareholder consent, the performance of certain financial covenants and the effectiveness of the registration statement filed with the SEC.

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