1335294--4/15/2009--KeyOn_Communications_Holdings

related topics

{product, market, service}

{acquisition, growth, future}

{stock, price, share}

{stock, price, operating}

{system, service, information}

{control, financial, internal}

{capital, credit, financial}

{debt, indebtedness, cash}

{customer, product, revenue}

{cost, operation, labor}

{regulation, change, law}

{operation, natural, condition}

{property, intellectual, protect}

{interest, director, officer}

Risks Relating to the Company The Company s business will require additional capital for operations and debt service. KeyOn might not have sufficient capital or generate enough cash flow to service interest obligations or repay its indebtedness. The Company is seeking to obtain third-party financing in a very challenging economic environment . The Company may be unable to successfully execute on either its acquisition strategy or organic growth strategy, both of which it depends upon to drive the growth of its subscriber base. Any acquisitions the Company makes could result in integration difficulties that could lead to substantial costs, delays or other operational or financial difficulties. The Company has a history of operating losses and expects to continue suffering losses for the foreseeable future. The Company may experience difficulties in maintaining its existing network, as well as in constructing, upgrading and introducing new technologies, such as WiMAX, into networks, which could adversely affect customer satisfaction, increase subscriber churn and reduce the Company s revenues. The Company utilizes unlicensed spectrum, which is subject to intense competition, low barriers of entry and potential interference from multiple competing users. Unlicensed spectrum becomes impractical to use in certain markets and the Company is required to obtain and maintain rights to use licensed spectrum in those markets which could negatively impact its ability to execute its business strategy. To the extent KeyOn secures licensed spectrum, it faces increased operational costs and greater regulatory scrutiny. Depending upon the geographic market, some of the Company s competitors are better established and have engineering, sales and marketing resources that are significantly greater than the Company has, which may make it difficult to attract and retain subscribers. The Company relies on third party sales representatives to assist in selling its services, and the failure of these representatives to perform as expected could reduce the Company s future sales. The Company relies on a limited number of third party suppliers that produce its network and customer premise equipment, and occasionally install or service its network sites. The Company is also currently using one or more third-party providers to supply the Company with certain aspects of its video and VoIP services. If these companies fail to perform or experience delays, shortages or increased demand for their services, KeyOn may face a shortage of components, increased costs, and may be required to suspend its network deployment and its product and service introduction. The Company s inability to use shares of its common stock or to obtain capital to finance future acquisitions could impair the growth and expansion of its business. The Company depends on the continued availability of leases for the deployment of its communications equipment. The Company s business depends on its service brands, and if it does not maintain and enhance its brands, the Company s ability to attract and retain subscribers may be impaired and its business and operating results may be harmed. Excessive customer churn may adversely affect the Company s financial performance by slowing customer growth, increasing costs and reducing revenue. Interruption or failure of the Company s networks, which in certain rural markets are often subject to severe weather such as storms or tornados, could impair the Company s ability to provide its services, which could damage the Company s reputation and harm operating results. The industry in which the Company operates is continually evolving. The Company s services may become obsolete, and it may not be able to develop competitive services on a timely basis or at all. The Company is subject to extensive regulation that could limit or restrict its activities. If the Company fails to comply with these regulations, it may be subject to penalties, including fines and suspensions, and past due fees and interest, which may adversely affect the Company s financial condition and results of operations. In providing the Company s services, the Company could infringe on the intellectual property rights of others, which may cause the Company to engage in costly litigation and, if the Company does not prevail, could also cause the Company to pay substantial damages and prohibit the Company from selling its services. Risks Relating to the Company s Common Stock The Company became public by means of a reverse merger, and as a result the Company is subject to the risks associated with the prior activities of the public company. The Company has not paid dividends in the past and do not expect to pay dividends in the future. Any return on your investment may be limited to the value of the Company s common stock. The Company s common stock may be affected by limited trading volume and price fluctuations, each of which could adversely impact the value of its common stock. In an effort to conserve resources, the Company may choose to voluntarily delist from the over the counter bulletin board . Risks Relating to the Company s Organization The Company s executive officers and directors own a substantial amount of the Company s common stock and, therefore, exercise significant control over its corporate governance and affairs, which may result in their taking actions with which you do not agree. The Company is subject to financial reporting and other requirements for which the Company s accounting, internal audit and other management systems and resources may not be adequately prepared. If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about The Company s business, its stock price and trading volume could decline.

Full 10-K form ▸

1335294--4/15/2009--KeyOn_Communications_Holdings_Inc.