-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UONlcVMCI7BJqsCeDS6HOWbC22pITNBY4j77k8iW6CMoSkyWuARzRGQX5tV27hgy G2TPEPJpOanIBtk7i8umOQ== 0000891092-02-000168.txt : 20020414 0000891092-02-000168.hdr.sgml : 20020414 ACCESSION NUMBER: 0000891092-02-000168 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020205 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOG ON AMERICA INC CENTRAL INDEX KEY: 0001074927 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 050496586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25761 FILM NUMBER: 02536644 BUSINESS ADDRESS: STREET 1: ONE COOKSON PLACE STREET 2: 6TH FLOOR CITY: PROVIDENCE STATE: RI ZIP: 02903 BUSINESS PHONE: 4015498200 MAIL ADDRESS: STREET 1: 3 REGENCY PLAZA CITY: PROVIDENCE STATE: RI ZIP: 02903 8-K 1 e13028_8k.txt FORM 8-K UNITED STATES 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): February 5, 2002 LOG ON AMERICA, INC. ----------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware ----------------------------------------------------------------- (State or other jurisdiction of incorporation) 0-25761 ----------------------------------------------------------------- (Commission File Number) 05-0496586 ----------------------------------------------------------------- (IRS Employer Identification No.) One Cookson Place, 6th Floor, Providence, Rhode Island 02903 ----------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (401) 459-6550 Item 5. Other Events and Regulation FD Disclosure On February 5, 2002, Log On America, Inc. (the "Company") entered into settlement agreements with the holders of the remaining 50% of its Series A Preferred Stock. The terms of the settlements are described in the annexed press releases. The Company previously settled its claims against Marshall Capital Management, Inc. (which owned the other 50% of the Series A Preferred Stock) and Marshall's affiliate, Credit Suisse First Boston. The Company issued the Series A Preferred Stock on February 23, 2000 for total consideration of $15,000,000. In August 2002, the Company received a $3,250,000 settlement payment from Marshall affiliate Credit Suisse First Boston. Pursuant to the settlement agreements, the Company will retire the entire Series A Preferred stock in exchange for 500,000 shares of common stock, two new series of preferred securities convertible into approximately 3.1 million shares of common stock, and $8,852,775 which will be paid to certain holders of the Series A Preferred. Of that amount, $2,500,000 will be paid in short term installments over a period of six months, and the balance will be paid in monthly installments over approximately a four year period with interest at the rate of 9% per annum. Item 7. Financial Statements and Exhibits. (c) Exhibits. 99.1 February 8, 2002 press release concerning settlement with Promethean Asset Management L.L.C. and HFTP Investments. 99.2 February 8, 2002 press release concerning settlement with other Series A Preferred Stock holders. 99.3 July 26, 2001 press release concerning settlement with Marshal Capital Management, Inc. and Credit Suisse First Boston Corporation. 2 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. LOG ON AMERICA, INC. (Registrant) Date: February 12, 2002 /s/ David Paolo ------------------------------------- David Paolo, President and Chief Executive Officer 3 EX-99.1 3 e13028ex99_1.txt PRESS RELEASE RE: PROMETHEAN Exhibit 99.1 [Logo of Log On America] Contact: David Paolo Log On America, Inc. settlement@loa.com www.loa.com For Immediate Release - --------------------- Log On America Settles Litigation with Preferred Holder PROVIDENCE, R.I., February 8, 2002 /PRNewswire/ -- Log On America, Inc. (OTC Bulletin Board: LOAX.OB - www.loa.com) today announced that it has entered into a settlement agreement, which settled all claims with Promethean Asset Management L.L.C. ("Promethean"), and HFTP Investments ("HFTP"). On February 23, 2000, HFTP invested $3.75 million to purchase shares of convertible preferred stock of the Company. Following suit by the Company, HFTP submitted a redemption claim in the amount of $5,852,775 pursuant to its contract with the Company. HFTP also brought suit against the Company in Delaware for this amount, among other damages. David Paolo, LOA's CEO states: "After investigation, the Company concluded that it could not substantiate its claims against HFTP and Promethean. The Company after due investigation has found no evidence of wrongdoing or violation, either legal or contractual, by Promethean and HFTP. The Company now believes to be true the affidavit submitted by James O'Brien that neither HFTP nor Promethean shorted stock of Log On America (directly or indirectly), despite the fact that neither HFTP nor Promethean were prohibited from doing so. Further, the Company now believes that it may have received erroneous information from certain sources that may have been competitors of Promethean." Accordingly, the Company is honoring the full redemption claim of $5,852,775. The $5,852,775 will be paid as follows: $500,000 on or before February 28th, $500,000 in 60 days and the remaining $4,852,775 plus interest at the rate of 9% will be payable in monthly installments of $100,000 until the obligation is fully discharged. The obligation to pay HFTP is evidenced by a Stipulation and Order entered in the Federal Court in the Southern District of New York providing for entry of judgment in the event of payment default. As further assurance, the Company has also agreed to a confession of judgment to be held in escrow pending any defaults by LOA in its payment obligations in the amount of $5,852,775, less any payments previously made by LOA in accordance with the above provisions, in the relevant Delaware court. David R. Paolo ended with: "We appreciate Promethean recognizing the challenges we face as a business. Log On America will now have a finite capital structure of approximately 12,000,000 shares including conversion of all classes of Preferred Stock and long-term debt of approximately $6,600,000." 1 About Log On America Log On America is a full service provider of business communication technologies. We deliver a unique end-to-end customer experience from consultation through professional managed services. Our core services include: Business Telephone & Voicemail Systems, Dial-up & High-speed Internet Access, Website Creation & Hosting, Integrated Voice & Data Services, Server Collocation, Niche ASP Applications, Managed Service Level Agreements, and Network Consultancy, Architecture & Implementation (LAN,WAN,VPN). Our expertise lies in a wide array of business communication solutions all of which may be customized and scaled to the specific needs of your business today and in the future. Forward-looking Statements Statements made in this news release, may contain forward-looking statements concerning our business and products. Our actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond our control. Other risks inherent in our business are described in our Securities and Exchange Commission filings, including our most recently filed Forms 10KSB and 10QSB. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release. # # # 2 EX-99.2 4 e13028ex99_2.txt PRESS RELEASE RE: SERIES A STOCKHOLDERS Exhibit 99.2 [Logo of Log On America] Contact: David Paolo Log On America, Inc. settlement@loa.com www.loa.com For Immediate Release - --------------------- Log On America Settles with its Remaining Preferred Holder PROVIDENCE, R.I., February 8, 2002 /PRNewswire/ -- Log On America, Inc. (OTC Bulletin Board: LOAX.OB - www.loa.com), which earlier today announced the settlement of its litigation with Promethean Asset Management L.L.C. and HFTP Investments, also announced today that it has entered into a settlement agreement, which settled all claims with the remaining holders of its Series A Convertible Preferred Stock and their affiliates (the "Remaining Holders"). This settlement repairs the capital structure of Log On America (the "Company"), preserves shareholder value, and will allow the company to put its complete attention to growing its business. Pursuant to the settlement with the Remaining Holders, the Company will pay the following amounts and issue the following Promissory Note and Convertible Preferred Stock to them: (1) the sum of $500,000 within three business days of the execution of formal settlement documents, which is expected to occur on or about February 28, 2002; (2) $250,000 on or about May 1, 2002; (3) $500,000 on or about August 1, 2002, plus interest at 8% per annum; (4) on or about February 28, 2002, the Company will execute a three year Promissory Note (the "Note") payable to the Remaining Holders in the amount of $1,750,000, which will bear interest in the amount of 9% per annum, paid semi-annually; (5) on or about February 28, 2002, the Company will issue 500,000 shares of its common stock to the Remaining Holders from a partial conversion of the Series A Preferred Stock according to its terms and the balance of the Series A Preferred Stock will be exchanged for the Series C Convertible Preferred Stock described below; and (6) the Company will issue Series C Convertible Preferred Stock to the Remaining Holders with a face value of $1,725,000, repayable in three years in cash or stock at the Company's election, with a conversion price of $1.25 per share and bearing interest at 9% payable semi-annually. In the event that the Company fails to make any of the payments under (1), (2), (3) or (4) within five business days after notice of a default in payment, judgment may be entered against the Company and in favor of the Remaining Holders in the amount of $5,752,775 less any payments made by the Company in accordance with the above provisions. David R. Paolo, the Company's Chairman and CEO, stated: "We are pleased to have fully and finally resolved our disputes with the Remaining Holders. After investigation, we concluded that the Company's factual allegations against the Remaining Holders, including their affiliates and employees, could not be substantiated and, as a result, we believed it was appropriate to enter into the Settlement Agreement." Mr. Paolo continued: "This agreement brings final rest to the capital structure problems that have plagued Log On America over the past 2 years. -more- Log On America will now have a finite capital structure of approximately 12,000,000 shares including conversion of all classes of Preferred Stock and long-term debt of approximately $6,600,000." 1 About Log On America Log On America is a full service provider of business communication technologies. We deliver a unique end-to-end customer experience from consultation through professional managed services. Our core services include: Business Telephone & Voicemail Systems, Dial-up & High-speed Internet Access, Website Creation & Hosting, Integrated Voice & Data Services, Server Collocation, Niche ASP Applications, Managed Service Level Agreements, and Network Consultancy, Architecture & Implementation (LAN,WAN,VPN). Our expertise lies in a wide array of business communication solutions all of which may be customized and scaled to the specific needs of your business today and in the future. Forward-looking Statements Statements made in this news release, may contain forward-looking statements concerning our business and products. Our actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond our control. Other risks inherent in our business are described in our Securities and Exchange Commission filings, including our most recently filed Forms 10KSB and 10QSB. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release. # # # 2 EX-99.3 5 e13028ex99_3.txt PRESS RELEASE RE: MARSHALL Exhibit 99.3 Log On America, Inc. Announces Settlement of Actions Against Credit Suisse First Boston and Marshal Capital PROVIDENCE, R.I.--(BUSINESS WIRE)--July 26, 2001--Log On America, Inc. (NASDAQ:LOAX) today announced settlement of its pending lawsuits against Credit Suisse First Boston Corporation and Marshal Capital Management Inc., the holder of one half of the Company's Series A Convertible Preferred stock. Credit Suisse will pay Log On America $3,250,000 and Marshal Capital will exchange its Series A Preferred shares for a new Series B Convertible Preferred stock with a face value of $7,500,000. The Series B Preferred Stock will be convertible into common stock of the Company at a fixed conversion rate of $4.50 per share. The Company will continue its pending lawsuit against the two remaining holders of its Series A Preferred stock. About Log On America Log On America is a full service provider of business communication technologies. We offer a unique end-to-end customer experience from consultation through professional managed services. Our expertise lies in a wide array of business communication services like PBX telephone systems and service, high-speed Internet access, web design, development and hosting, integrated products like "WebinOne", niche ASP applications and network analysis, installation and maintenance. All Log On America services may be customized and scaled to the specific needs of your business today and in the future. Forward Looking Statements Statements made in this news release, may contain forward-looking statements concerning our business and products. Our actual results may differ materially depending on a number of risk factors including, but not limited to, the following: general economic and business conditions, development, shipment, market acceptance, additional competition from existing and new competitors, changes in technology, and various other factors beyond our control. Other risks inherent in our business are described in our Securities and Exchange Commission filings, including our most recently filed Forms 10KSB and 10QSB. We undertake no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this release. 1 -----END PRIVACY-ENHANCED MESSAGE-----