As filed with the Securities and Exchange Commission on December 3, 1999
Registration No. 333-70307
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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LOG ON AMERICA, INC.
(Name of Small Business Issuer in its Charter)
Delaware 7375 05-0496586
(State of Incorporation) (Primary Standard Industrial (I.R.S. Employer
Classification Code Number) Identification No.)
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3 Regency Plaza
Providence, Rhode Island 02903
(401) 459-6298
(Address and telephone number of principal executive
offices and principal place of business)
--------------------
David R. Paolo, President
Log On America, Inc.
3 Regency Plaza
Providence, Rhode Island 02903
(401) 459-6298
(Name, address and telephone number of agent for service)
Copies to:
Gary W. Mair, Esq. Lawrence B. Fisher, Esq.
Silverman, Collura & Chernis, P.C. Orrick, Herrington & Sutcliffe LLP
381 Park Avenue South, Suite 1601 30 Rockefeller Plaza, 40th Floor
New York, New York 10016 New York, New York 10112
Telephone (212) 779-8600 Telephone (212) 506-3660
Facsimile (212) 779-8858 Facsimile (212) 506-3730
<PAGE>
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]______________________________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________________________________
If this form is a post-effective registration statement filed pursuant to
Rule 462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]______________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
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<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum Prosposed Minimum
Title of Each Class of Securities to be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered Share(1) Price (1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value 2,530,000(2) $10.00 $25,300,000 $7,033.40
- ------------------------------------------------------------------------------------------------------------------------------------
Representative's Warrants to purchase shares
of Common Stock 220,000 $.0001 $22 $0(4)
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Common stock Issuable Upon Exercise of
Representative's Warrants 220,000(3) $12.00 $2,640,000 $733.92
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Common Stock held by Selling Stockholders
1,896,116 $10.00 $18,961,160 $5,271.20
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Common Stock underlying Warrants held by
Selling Stockholders 1,131,921(3) $10.00 $11,319,210 $3,146.74
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Total 5,998,037 -- $58,220,392 $16,185.27(5)
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457 of the Securities Act.
(2) Includes 330,000 shares of Common Stock issuable upon exercise of an
over-allotment option granted to the Underwriter.
(3) Pursuant to Rule 416 of the Securities Act, there are also being
registered hereby such additional indeterminate number of shares of Common
Stock as may become issuable pursuant to the anti-dilution provisions of
the Representative's Warrants.
(4) No registration fee is required pursuant to Rule 457 of the Securities
Act.
(5) The registrant has previously paid $16,185.27
in registration fees.
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Registration Fee $16,185.27
Nasdaq National Market System Listing Fee $ 35,000
NASD Filing Fee $ 4,676
Printing and Engraving Expenses $ 75,000*
Legal Fees and Expenses $125,000*
Accounting Fees and Expenses $ 50,000*
Transfer Agent's Fees and Expenses $ 10,000*
Blue Sky Fees and Expenses $ 35,000*
Miscellaneous Expenses $ 10,000*
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TOTAL $360,861*
*Estimated
The Selling Stockholders will not pay any portion of the foregoing
expenses of issuance and distribution.
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
LOA's Certificate of Incorporation, as amended and Amended Bylaws limit
the liability of directors and officers to the maximum extent permitted by
Delaware law. Delaware law provides that directors of a corporation will not be
personally liable for monetary damages for breach of their fiduciary duties as
directors, including gross negligence, except liability for (i) breach of the
directors' duty of loyalty; (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of the law, (iii) the
unlawful payment of a dividend or unlawful stock purchase or redemption, and
(iv) any transaction from which the director derives an improper personal
benefit. Delaware law does not permit a corporation to eliminate a director's
duty of care, and this provision of LOA's Certificate of Incorporation has no
effect on the availability of equitable remedies, such as injunction or
rescission, based upon a director's breach of the duty of care.
LOA is planning to enter into indemnification agreements with each of its
current and future directors and officers which provide for indemnification of,
and advancing of expenses to, such persons to the greatest extent permitted by
Delaware law, including by reason of action or inaction occurring in the past
and circumstances in which indemnification and the advancing of expenses are
discretionary under Delaware law.
LOA's Certificate of Incorporation authorizes LOA to purchase and maintain
insurance for the purposes of indemnification. LOA intends to apply for
directors' and officers' insurance, although there can be no assurance that LOA
will be able to obtain such insurance on reasonable
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<PAGE>
terms, or at all.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of LOA
pursuant to the foregoing provisions, or otherwise, LOA has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
Corporation Takeover Provisions
Section 203 of the Delaware General Corporation Law
LOA is subject to the provisions of Section 203 of the Delaware General
Corporation Law ("Section 203"). Under Section 203, certain "business
combinations" between a Delaware corporation whose stock generally is publicly
traded or held of record by more than 2,000 stockholders and an "interested
stockholder" are prohibited for a three-year period following the date that such
stockholder became an interested stockholder, unless (i) the corporation has
elected in its original certificate of incorporation not to be governed by
Section 203 (LOA did not make such an election) (ii) the business combination
was approved by the Board of Directors of the corporation before the other party
to the business combination became an interested stockholder (iii) upon
consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction (excluding voting stock owned
by directors who are also officers or held in employee benefit plans in which
the employees do not have a confidential right to render or vote stock held by
the plan) or, (iv) the business combination was approved by the Board of
Directors of the corporation and ratified by two-thirds of the voting stock
which the interested stockholder did not own. The three-year prohibition also
does not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an
interested stockholder during t he previous three years or who became an
interested stockholder with the approval of the majority of the corporation's
directors. The term "business combination" is defined generally to include
mergers or consolidations between a Delaware corporation and an "interested
stockholder," transactions with an "interested stockholder" involving the assets
or stock of the corporation or its majority-owned subsidiaries and transactions
which increase an interested stockholder's percentage ownership of stock. The
term "interested stockholder" is defined generally as a stockholder who,
together with affiliates and associates, owns (or, within three years prior, did
own) 15% or more of a Delaware corporation's voting stock. Section 203 could
prohibit or delay a merger, takeover or other change in control of LOA and
therefore could discourage attempts to acquire LOA.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
December 1998 Private Placement (December Placement)
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<PAGE>
In December 1998 LOA closed a private placement of 24 units ("Units"),
each unit consisting of 15,384 shares of Common Stock, at a price of $50,000 per
Unit. LOA sold 369,216 shares of its Common Stock to "accredited investors," as
that term is defined in the Securities Act, and raised gross proceeds of
$1,200,000. The placement agent for the December Placement was Security Capital
Trading, Inc., which received a commission of 10% of the $1,200,000 raised and a
non-accountable expense allowance of 3% per Unit sold. Security Capital Trading,
Inc. was granted warrants to purchase (a) 13,076 shares of Common Stock reserved
for issuance upon the exercise of outstanding warrants granted on December 3,
1998, exercisable during the four year period commencing December 1999 and
expiring December 2003 at $3.90 per share; and (b) 23,845 shares of Common Stock
reserved for issuance upon the exercise of outstanding warrants, granted on
December 23, 1998, exercisable during the four year period commencing December,
1999 and expiring December 2003 at $3.90 per share. The December Placement was
exempt from state and federal registration pursuant to Rule 506 of Regulation D,
and Section 4(2) of the Securities Act.
July 1998 Private Placement
In July 1998 LOA closed a private placement of shares of Common Stock at a
price of $1.00 per share. LOA sold 275,000 shares of Common Stock to accredited
investors and received gross proceeds of $275,000. The private placement was
offered by LOA's officers and directors, none of whom received commissions for
the sales. The private placement was exempt from state and federal registration
pursuant to Rule 506 of Regulation D, and Section 4(2) of the Securities Act.
Recent Acquisitions.
On August 3, 1999, we completed the acquisition of all the outstanding
shares of Cybertours, Inc. in exchange for 506,667 shares of our Common Stock
valued at $7,600,000. Pursuant to the terms of this agreement, dated July 2,
1999, Cybertours has certain demand rights to register the shares.
On September 20, 1999, we acquired certain assets of Netquarters Inc. in
exchange for $256,000 in cash and 16,000 shares of our Common Stock valued at
$256,000, pursuant to an agreement, dated August 24, 1999.
Warrants
In June 1999, LOA granted warrants for the purchase of 50,667 shares of
common stock at an exercise price of $12.25 per share to one entity,
International Technology Marketing Inc. in consideration of services rendered.
The warrants provide for piggyback registration rights and are exercisable
during the 5 year period commencing June 17, 1999. No information was given to
this accredited entity but it was provided with the opportunity to review LOA's
corporate records.
In August 1998, LOA granted warrants for the purchase of 1,000,000 shares
of Common Stock at an exercise price of $1.00 per share to four entities, ICC
Consulting, Inc., Scofield Dennison Corp., Northeastern Fibercom and Horizon
Fiber, Inc. in consideration of certain business promotion and sales. The
warrants provide for piggyback registration rights and are exercisable during
the four year period commencing January 15, 1999. No information about LOA was
given to these entities, but they were provided with the opportunity to review
LOA's corporate records.
In December 1998, LOA granted warrants for the purchase of 50,000 shares
of Common Stock to Silverman, Collura, Chernis & Balzano, P.C. ("SCCB"), LOA's
legal counsel, for services rendered. The warrants provide for cashless exercise
and piggy-back registration rights. The warrants are exercisable during the five
year period commencing December 31, 1998 at an exercise price of $3.50 per
share. LOA had a pre-existing relationship with SCCB prior to the warrant
issuance. SCCB was provided with complete due diligence documents relating to
LOA prior to the issuance of the warrants.
In December 1998, LOA granted warrants for the purchase of 45,000 shares
of Common Stock to Kenneth M. Cornell, LOA's interim CFO, for services rendered.
The warrants provide for piggy-back registration rights and are exercisable
during the four year period commencing December 31, 1998 at an exercise price of
$3.25 per share. Mr. Cornell
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<PAGE>
was given access to all corporate records prior to the issuance of the warrants.
All of the above warrants were issued pursuant to an exemption under
Section 4(2) of the Securities Act.
ITEM 27. EXHIBITS
Exhibit No. Description
- ----------- -----------
1.1* Form of Underwriting Agreement
1.2* Form of Underwriter's Warrant Agreement
3.1* Certificate of Incorporation of Registrant, as amended
3.2* By-laws of Registrant, as amended
4.1* Specimen certificate representing Registrant's Common Stock
5.1* Opinion of Silverman, Collura, Chernis & Balzano, P.C. with
respect to legality of the securities of the Registrant
being registered
10.1* David R. Paolo Employment Agreement
10.2* Raymond Paolo Employment Agreement
10.3* Form of Lock-up Agreement
10.4* Lease Agreement for premises located at 3 Regency Plaza,
Providence, Rhode Island.
10.5* 1999 Stock Option Plan
10.6* Kenneth M. Cornell Employment Agreement
10.7* Acquisition agreement between Cybertours, Inc. and Log On
America, Inc.
10.8* Equipment and Service Agreement with Nortel Networks
10.9* Line of Credit Agreement between Log On America, Inc. and
Fleet National Bank
23.1* Consent of Silverman, Collura, Chernis & Balzano, P.C.
(included in Exhibit 5.1)
23.2* Consent of Tauber & Balser, P.C.
24.1 Power of Attorney (set forth on signature page of the
Registration Statement)
27 Financial Data Schedule
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<PAGE>
* previously filed.
b. Financial Statement Schedules.
None
ITEM 28. UNDERTAKINGS.
(a) Rule 415 Offerings.
The undersigned issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the Securities
Act;
(ii) Reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
Registration Statement; and
(iii) Includes any additional or changed material information on the plan
of distribution.
provided, however, the paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
in a post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.
(b) Request for acceleration of effective date.
(1) Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the issuer has been advised that in the opinion of the
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<PAGE>
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the issuer of expenses incurred or paid by a director, officer or
controlling person of the issuer in the successful defense of any action, suit
or proceedings) is asserted by such director, officer or controlling person in
connection with the securities being registered, the issuer will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such court.
(2) For determining liability under the Securities Act, treat the
information in the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in the form of prospectus
file by the small business issuer under rule 424(b)(1), or (4) or 457(h) under
the Securities Act as part of this registration statement as at the time the
Commission declares it effective.
(3) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration statement,
and that offering of the securities at that time as the initial bona fide
offering of those securities.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing this Post Effective Amendment No. 1 to Form SB-2
and authorized this registration statement to be signed on its behalf by the
undersigned, in the City of Providence, State of Rhode Island, on December 2,
1999.
LOG ON AMERICA, INC.
By:s/ David R. Paolo
---------------------------------
David R. Paolo, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
respective capacities with LOA and on the dates indicated.
Signature Title Date
--------- ----- ----
s/ David R. Paolo President, CEO and Chairman December 2, 1999
- --------------------------
David R. Paolo
* Principal Financial Officer and December 2, 1999
- -------------------------- Principal Accounting Officer
Kenneth M. Cornell
Vice President of Administration,
* Secretary, Treasurer and Director December 2, 1999
- --------------------------
Raymond E. Paolo
- -------------------------- Vice President of Operations and December 2, 1999
Donald J. Schattle II Technology, Director
s/ Shastri Divakaruni Director December 2, 1999
- --------------------------
Shastri Divakaruni
s/ David M. Robert Director December 2, 1999
- --------------------------
David M. Robert
s/ Steven Gilbert
- --------------------------
Steven Gilbert Executive Vice President, December 2, 1999
Director
* David Paolo as attorney-in-fact
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Sep-30-1999
<CASH> 18,890,649
<SECURITIES> 0
<RECEIVABLES> 578,792
<ALLOWANCES> (15,209)
<INVENTORY> 0
<CURRENT-ASSETS> 19,699,429
<PP&E> 3,063,712
<DEPRECIATION> 295,854
<TOTAL-ASSETS> 32,699,465
<CURRENT-LIABILITIES> 3,675,975
<BONDS> 0
0
0
<COMMON> 52,288
<OTHER-SE> 28,309,057
<TOTAL-LIABILITY-AND-EQUITY> 32,699,465
<SALES> 1,682,357
<TOTAL-REVENUES> 1,682,357
<CGS> 720,979
<TOTAL-COSTS> 4,034,376
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 44,378
<INCOME-PRETAX> (1,985,857)
<INCOME-TAX> (1,985,857)
<INCOME-CONTINUING> (1,985,857)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,985,857)
<EPS-BASIC> (0.32)
<EPS-DILUTED> (0.32)
</TABLE>
