<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 11, 1999
----------------
ONLINE SYSTEM SERVICES, INC.
----------------------------
(Exact name of registrant as specified in its charter)
Colorado
--------
(State or other jurisdiction of incorporation)
0-28462 84-1293864
------- ----------
(Commission File Number) (IRS Employer Identification No.)
1800 Glenarm Place, Denver, Colorado 80202
------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 296-9200
--------------
N/A
---
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
On January 11, 1999, Registrant entered into a Securities Purchase
Agreement with Arrow Investors II LLC ("Arrow") pursuant to which Arrow acquired
3,000 shares of Registrant's Series C Convertible Preferred Stock for an
aggregate purchase price of $3,000,000. Arrow also acquired for $1,000 a
"Mandatory Warrant" pursuant to which Arrow has the right and commitment,
subject to certain conditions set forth in the Mandatory Warrant, to purchase an
additional 2,000 shares of the Series C Convertible Preferred Stock prior to
June 30, 1999. The Series C Convertible Preferred Stock is convertible into
Common Stock of Registrant at a variable conversion price equal to the lesser of
the Maximum Conversion Price (as defined in the terms of the Series C Preferred
Stock), initially $20.65, or the market price for Registrant's Common Stock at
the time of conversion. The terms of the Series C Preferred Stock define market
price as the average of the five lowest closing bid prices for Registrant's
Common Stock during the 44 consecutive trading days immediately preceding the
conversion of the Series C Convertible Preferred Stock. Registrant has agreed to
file registration statements pursuant to the Securities Act of 1933 for the
Common Stock issuable upon conversion of the Series C Convertible Preferred
Stock. For additional information regarding the terms of the transaction,
reference is made to the Securities Purchase Agreement and the Exhibits thereto
which are filed as an Exhibit to this report. The securities were issued to
Arrow without registration under the Securities Act of 1933 in reliance upon the
exemptions from registration provided in Section 4(2) and Regulation D of the
Act.
Based on current accounting standards, Registrant will be required to
record a non-operating expense of approximately $3,000,000 for the quarter ended
March 31, 1999 as a result of the issuance of the Series C Preferred Stock.
While these charges will not affect Registrant's operating loss or working
capital during such period, they are expected to result in an increase of
approximately $3,000,000 in the Registrant's net loss available to the holders
of its common stock for the quarter ending March 31, 1999.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statement - None.
(b) Exhibits
(i) Securities Purchase Agreement dated January 11, 1999 between
Registrant and Arrow Investors II LLC, including as exhibits thereto:
Designation of Series C Preferred Stock; Form of Mandatory Warrant; Form
of Warrant; and Registration Rights Agreement (incorporated by reference
to the Registrant's Form 8_K, filed January 13, 1999, Commission File No.
0-28462).
-2-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf of the undersigned
thereunto duly authorized.
Dated: February 1, 1999 ONLINE SYSTEM SERVICES, INC.
By /s/ Thomas S. Plunkett
-------------------------
Thomas S. Plunkett
Chief Financial Officer
-3-
