Towerstream Buying Sparkplug Assets

Towerstream (Nasdaq:TWER) has agreed to acquire the assets of Sparkplug Communications, a provider of fixed wireless broadband services in five states. The deal is valued at $1.6 million in cash and stock. Sparkplug shareholders include Ignition Partners.

PRESS RELEASE

Towerstream (Nasdaq:TWER), a leading high-speed wireless Internet service provider, and Sparkplug Communications Inc. have entered a definitive agreement for Towerstream to acquire certain business assets from Sparkplug Communications in a transaction valued at $1.6 million in cash and common stock. Under the terms of the agreement, Towerstream will acquire Sparkplug Communications business assets operating in Chicago, Illinois and Nashville, Tennessee including all customer contracts, network infrastructure, and related assets. The acquisition closing is subject to customary conditions and expected to close by the end of second quarter 2010.

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Chicago will become the Company’s third largest market with the transaction increasing the market’s customer base by approximately 150 percent, the annual revenue base by approximately $1.3 million, and the network coverage area by approximately 45 percent. Nashville will become the Company’s 11th market nationally.

“We have been working diligently to identify acquisition opportunities which not only increase our scale but integrate with our focus on high-margin monthly recurring business,” stated President and Chief Executive Officer Jeff Thompson. “Sparkplug Communications was an ideal match for us with its strong base of satisfied customers and attractive infrastructure. We are excited about integrating Sparkplug’s ten Points of Presence (PoPs) into our network and the significant number of new customer opportunities resulting from our expanded market coverage.”

“Our Chicago market was already profitable on an Adjusted EBITDA basis and this transaction should bring us to Adjusted EBITDA profitability on a corporate level once fully integrated,” noted Joseph Hernon, Chief Financial Officer. “This acquisition will be immediately accretive to Towerstream and reflects our philosophy to only seek opportunities that match our business model and enhance shareholder value.”

“Nashville is the 35th largest market in the country and its profile is very similar to Providence which was the first market that we launched approximately 10 years ago,” added Thompson. “Our Providence market generates gross margins of approximately 73 percent and Adjusted EBITDA margins of approximately 40 percent. We believe we can achieve similar results in Nashville over the long term and look forward to entering this market.”

Non-GAAP Measures:

The term “Adjusted EBITDA” is a measurement used by Towerstream to monitor business performance and is not a recognized measure under generally accepted accounting principles (“GAAP”). Accordingly, investors are cautioned in using or relying upon this measure as an alternative to a recognized GAAP measure. Our method of calculating this measure may differ from other issuers and, accordingly, may not be comparable to a similar measure presented by other issuers. We define Adjusted EBITDA as net income (loss) before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, stock-based compensation, gain or loss on disposal of property and equipment, gain or loss on derivative instruments, and other non-operating income or expenses. Adjusted EBITDA for a market also excludes corporate overhead expenses and other centralized costs.

About Towerstream:

Towerstream is a leading fixed WiMAX service provider in the U.S., delivering high-speed Internet access to businesses. Founded in 2000, the Company has established networks in ten markets including New York City, Boston, Los Angeles, Chicago, Philadelphia, the San Francisco Bay Area, Miami, Seattle, Dallas-Fort Worth, and the greater Providence area where the company is based. The company has won numerous awards for its high-speed wireless services and was the first carrier selected to join the WiMAX Forum