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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 22, 1999
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Internet America, Inc.
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(Exact name of registrant as specified in its charter)
Texas 000-25147 86-0778979
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Dallas Center, 350 N. St. Paul Street, Suite 3000, Dallas, Texas 75201
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 861-2500
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Item 2. Acquisition or Disposition of Assets.
On November 22, 1999, Internet America, Inc., a Texas corporation (the
"Company"), acquired all the issued and outstanding securities of PDQ.Net,
Incorporated, a Texas corporation ("PDQ.Net"), for 2,425,000 shares of Internet
America common stock. As a result of the purchase, PDQ.Net became a wholly owned
subsidiary of the Company. The Company became the indirect owner of all of the
assets of PDQ.Net, which include approximately 40,000 individual and corporate
internet access accounts and the computer equipment used to service those
accounts. The Company intends to continue to use these assets to provide
Internet access to customers. The acquisition was effected pursuant to an
Agreement and Plan of Merger dated September 12, 1999, by and among PDQ.Net,
certain of its shareholders ("Shareholders") and the Company. The acquisition
will be accounted for as a purchase.
To the best knowledge of the Company, at the time of the acquisition
there was no material relationship between (i) PDQ.Net and the Shareholders on
the one hand and (ii) the Company, or any of its affiliates, any director or
officer of the Company, or any associate of such director or officer on the
other hand.
The consideration paid by the Company was 2,425,000 shares of Internet
America common stock. The consideration was determined by arms-length
negotiations between the parties to the Agreement and Plan of Merger.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a) Financial statements of business acquired (1) PAGE
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(i) Balance Sheets as of December 31, 1998 and 1997
(ii) Statements of Operations
for the years ended December 31, 1998 and 1997
(iii) Statements of Stockholders' Deficit for the years ended
December 31, 1998 and 1997
(iv) Statements of Cash Flows
for the years ended December 31, 1998 and 1997
(v) Interim Consolidated Balance Sheet
as of September 30, 1999 (unaudited)
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(vi) Consolidated Statements of Operations for the nine months
ended September 30, 1999 and September 30, 1998 (unaudited)
(vii) Consolidated Statements of Cash Flows for the nine months
ended September 30, 1999 and September 30, 1998 (unaudited)
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(b) Proforma financial information (unaudited) (1) PAGE
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(i) Pro Forma Interim Consolidated Balance Sheet
as of September 30, 1999
(ii) Pro Forma Consolidated Statement of Operations for the year
ended June 30, 1999
(iii) Pro Forma Interim Consolidated Statement of Operations for the
three months ended September 30, 1999
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(c) Exhibits.
The following is a list of exhibits filed as part of this Current
Report on Form 8-K:
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Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated September 12, 1999, among
Internet America Inc., GEEK Houston II, Inc., PDQ.Net,
Incorporated and certain shareholders of PDQ.Net,
Incorporated. (2)
23.1 Consent of Deloitte & Touche LLP. (3)
23.2 Consent of Grant Thornton, LLP. (3)
99.1 Press Release of Internet America, Inc. dated November 22,
1999. (4)
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(1) It is impractical for the registrant to file such financial statements
and related financial data schedule at this time. Such financial
statements and related financial data schedule will be filed under
cover of Form 8-K/A as soon as practicable, but no later than 60 days
after the date by which this report on Form 8-K was required to be
filed.
(2) Incorporated by reference to Exhibit A to the Company's preliminary
proxy statement and definitive proxy statement filed with the
Securities and Exchange Commission on October 7, 1999 and October 19,
1999, respectively (File No. 000-25147).
(3) To be filed by amendment.
(4) Filed herewith.
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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.
INTERNET AMERICA, INC.
Date: December 7, 1999 By: /s/ JAMES T. CHANEY
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James T. Chaney,
Chief Financial Officer
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INDEX TO EXHIBITS
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Exhibit No. Description
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2.1 Agreement and Plan of Merger, dated September 12, 1999, among
Internet America Inc., GEEK Houston II, Inc., PDQ.Net,
Incorporated and certain shareholders of PDQ.Net,
Incorporated. (1)
23.1 Consent of Deloitte & Touche LLP. (2)
23.2 Consent of Grant Thornton, LLP. (2)
99.1 Press Release of Internet America, Inc. dated November 22, 1999. (3)
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(1) Incorporated by reference to Exhibit A to the Company's preliminary
proxy statement and definitive proxy statement filed with the
Securities and Exchange Commission on October 7, 1999 and October 19,
1999, respectively (File No. 000-25147).
(2) To be filed by amendment.
(3) Filed herewith.
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Exhibit 99.1 - Press Release dated November 22, 1999
INTERNET AMERICA FINALIZES ACQUISITION OF PDQ.NET
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Over 145,000 Subscribers For Combined Entity
DALLAS, November 22 - Internet America, Inc. (Nasdaq: GEEK) announced
today that it has finalized the previously disclosed acquisition of PDQ.Net,
Incorporated, a Houston-based Internet service provider. Internet America
received approval from its shareholders to issue 2,425,000 shares of its common
stock in exchange for all of the outstanding stock of PDQ.Net. The acquisition
creates one of the largest Internet service providers (ISP) in Texas with more
than 145,000 subscribers and annual revenue of approximately $34 million. The
Company will realize economies of scale in networking and deploying new
technologies. As a result of the acquisition, PDQ.Net received two designates to
the Internet America Board of Directors.
"The acquisition of PDQ.Net is a milestone for Internet America as it,
in combination with our acquisition of NeoSoft, gives us tremendous market share
and estimated run rate revenue of about $14 million in Houston and Southeast
Texas," said Mike Maples, president and chief executive officer of Internet
America. "With the closing of this transaction, Internet America has experienced
phenomenal growth by roughly tripling in subscriber count and revenue-run rate
since our IPO last December. This unparalleled growth sets us apart and clearly
shows the successful execution of our business plan."
Based in Dallas, Internet America (www.airmail.net) is a leading
Internet service provider with 105,000 subscribers at September 30, 1999.
Through its 1-800-Be-A-Geek(r) television, radio and print campaigns that
emphasize the speed and quality of its Internet services and its commitment to
customer care, Internet America has become one of the leading Internet service
providers in its markets. Internet America offers a wide array of Internet
services tailored to meet the needs of individuals, including Expresslane DSL,
dial-up Internet access, multiple e-mail addresses, World Wide Web access, chat,
Usenet News and personal web sites. Internet America also provides a full range
of services to business customers, including dedicated high-speed access, web
hosting, server co-location and domain name registration.
Internet America serves the Houston market through its wholly owned
subsidiary, PDQ.Net (http://www.pdq.net), that city's largest ISP. PDQ.Net
delivers outstanding service and support to its customers and a full range of
Internet service for home and businesses. PDQ.Net offers home dial-up and DSL
service, corporate connectivity, Web site design and network consulting. PDQ.Net
received the Houston Press Reader's Choice Award in the category of Best
Internet Service Provider in 1997 and 1998 and was named Houston's #1 ISP by the
Houston Business Journal.
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Run rate revenue as used above is actual revenue for PDQ.Net and
NeoSoft for the fiscal quarter ended September 30, 1999, annualized. Achieving
this result is subject to the many risks and uncertainties that exist in
Internet America's business and operations as described below.
This press release may contain forward-looking statements relating to
future financial results or business expectations and, as a result, should be
considered as subject to the many uncertainties that exist in Internet America's
operations and business environment. Business plans may change as circumstances
warrant and actual results may differ materially as a result of a number of
factors. Such factors include, but are not limited to: the Company's expansion
and acquisition strategy, the Company's ability to achieve operating
efficiencies, the Company's dependence on network infrastructure, capacity,
telecommunications carriers and other suppliers, industry pricing and technology
trends, evolving industry standards, regulatory changes, and general economic
and business conditions. These risk factors and additional information are
included in Internet America's filings with the Securities and Exchange
Commission, including its Form 10-KSB for the fiscal year ended June 30, 1999
and its Form 10-QSB for the fiscal quarter ended September 30, 1999.
