SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 10 or 15(d) of the
Securities Exchange Act of 1934
SEPTEMBER 2, 1996
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Date of Report (date of earliest event reported)
TOUCH TONE AMERICA, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-24058 33-0424087
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(State or Other (Commission (IRS Employer Iden-
Jurisdiction of File Number) tification Number)
Incorporation)
4110 N. SCOTTSDALE ROAD
SUITE 170
SCOTTSDALE, ARIZONA 85251
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(Address of Principal Executive Offices
Including Zip Code)
(800) 535-2211
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(Registrant's telephone number,
including area code)
Page 1 of 5.
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Item 1. Changes in Control of Registrant
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N/A
Item 2. Acquisition or Disposition of Assets
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One September 2, 1996, the Registrant authorized the execution of
a letter of intent effective August 22, 1996 with Arcada
Communications, Inc. a Washington corporation to effect a share
exchange. Upon consummation of a definitive agreement, Arcada
will receive a promissory note in the amount of $1,500,000 and
12,500,000 shares of the Registrant's Common Stock which will
then constitute approximately 64% of the Registrant's Common
Stock then issued and outstanding.
Execution of a definitive agreement is subject to the approval of
the transaction by the Board of Directors and shareholders of
both companies and the satisfactory completion of each parties
due diligence of the other. All expenses of the transaction
shall be borne by the respective party incurring such costs and
expenses.
Arcada Communications, Inc. is a switched-based, value-added
common carrier of long distance and other telecommunication
services. Arcada currently provides services in 15 states with
its headquarters located in Seattle, Washington.
Item 3. Bankruptcy or Receivership
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N/A
Item 4. Changes in Registrant's Certifying Accountants
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N/A
Item 5. Other Events
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N/A
Item 6. Resignations of Registrant's Directors
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N/A
-2-
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Item 7. Financial Statements and Exhibits
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(a) and (b) The pro forma financial information and audited
financial statements required by this Item will
be filed as an amendment to this Report no later
than sixty (60) days from the date of this
Report.
(c) Exhibits: Filed herewith pursuant to Reg. S-K Item 601
Exhibit No. Page Description
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1 5 Letter of Intent between the Registrant and
Arcada Communications, Inc.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
TOUCH TONE AMERICA, INC.
Dated: September 11, 1996 By: /s/ Michael J. Canney
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Michael J. Canney
President
August 22, 1996
LETTER OF INTENT
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Touch Tone America
4110 North Scottsdale Road
Suite 170
Scottsdale, AZ 85251
RE: MERGER OF ARCADA COMMUNICATIONS, INC. AND TOUCH TONE AMERICA, INC.
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Dear Sirs:
This letter of intent will confirm the serious intent of Arcada
Communications, Inc., a Washington corporation, or one or more of its
affiliates ("Arcada"), to merge with and into or otherwise effect a share
exchange or similar arrangement with Touch Tone America, Inc., an Arizona
corporation ("TTA"), and TTA's serious intent to merge with and into or
otherwise effect a share exchange or similar arrangement with Arcada.
Following the merger of Arcada and TTA, all of the issued and outstanding
shares of capital stock of Arcada shall be canceled and Arcada shall
receive, upon consummation of the merger, (i) a Promissory Note in the
amount of $1,500,000, payable by TTA to Arcada, and (ii) 12,500,000 shares
of the capital stock of TTA, which shares shall represent approximately 64%
of TTA on a fully diluted basis. The 12,500,000 shares of common stock
acquired by Arcada shall not be subject to any lock-up provisions and shall
have all customary registration rights and privileges and shall be
registered simultaneously with the consummation of the transactions
contemplated herein.
In addition to acquiring 12,500,000 shares of TTA stock, representing
approximately 64% of the total issued and outstanding shares of capital
stock and other securities of TTA on a fully diluted basis, (full dilution
assumes the exercise of all issued
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Touch Tone America
August 22, 1996
Page 2
and outstanding rights, options, warrants and other securities), Arcada
shall also acquire management control of TTA, and control of the board of
directors of TTA.
Further, upon consummation of the merger, TTA (i) shall retain the
name of Touch Tone America, Inc., (ii) will have approximately $2.0 million
cash in its bank account, (iii) shall continue to be the sole owner of its
internet subsidiary "GetNet International", (iv) shall have no preferred,
convertible or other related securities issued and outstanding and, (v)
shall have no more than (x) 3,314,300 shares of common stock, (y) 3,367,400
warrants, rights and options (this includes 1,725,000 redeemable common
stock purchase warrants (the "Warrants") that shall not be either "called"
or redeemed by TTA during the forty-five (45) day period referenced herein
and required to complete the transactions contemplated herein), and (z)
200,000 additional shares of TTA common stock reserved for issuance by the
Board of Directors and/or Management of TTA, or any other securities,
issued and outstanding.
As part of the acquisition transaction, TTA will enter into employment
agreements with Arcada's management, on terms to be agreed to by the
parties, pursuant to which Arcada's management would act as management of
TTA.
You understand and agree that consummation of the above-described
transaction is subject to the following conditions:
1. Approval of the transaction by the board of directors and
shareholders, as the case may be, of Arcada and TTA;
2. Confirmation that (i) 3,314,300 shares of capital stock are
issued and outstanding as of the closing dated, (ii) 3,367,400 rights,
options and warrants are issued and outstanding and (iii) 200,000
additional shares of TTA common stock are reserved for issuance and for
purposes of this transaction shall be deemed to be issued and outstanding.
No other securities shall be issued, outstanding, allocated or otherwise
reserved for issuance, as of the closing date;
3. The preparation, negotiation, execution and delivery of a
definitive merger agreement satisfactory to TTA and Arcada, which merger
agreement will contain representations, conditions, covenants and
agreements customary for transaction of the type described herein and will
provide for the obtaining of all requisite corporate and other consents and
approvals, including any consents, if necessary, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended;
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Touch Tone America
August 22, 1996
Page 3
4. The satisfactory completion of a review and investigation by
Arcada and TTA, as the case may be, and respective counsel and agents for
Arcada and TTA, of the business, assets, financial condition and prospects
of Arcada and TTA, as the case may be; and
5. The form of merger and the documentation and agreements entered
into in connection with the merger agreement contemplated hereunder being
in form and substance satisfactory to TTA and Arcada.
This letter of intent shall expire, if not otherwise executed, on or
by Thursday, August 22, 1996, 12:00 noon PDT.
For a period of forty-five (45) days following the date of this letter
of intent Arcada and TTA hereby agree not to solicit or entertain any offer
from, or enter into any negotiations with, or provide any information to,
any third party relating to any sale, merger, share exchange or other
transaction inconsistent with this letter of intent. It is the intent of
the parties that, during this forty-five (45) day period, the parties will
engage in their preliminary due diligence relating to the proposed
acquisition transaction and negotiate and sign definitive acquisition
documents. Further, none of the Warrants may be either redeemed or
"called" during this forty-five (45) day period. Arcada and TTA agree to
conduct such due diligence and negotiate toward consummation of an
acquisition transaction in good faith. The signing and contents of the
letter of intent shall remain strictly confidential; PROVIDED HOWEVER, that
TTA may, if necessitated by applicable state and Federal securities laws,
publicly announce the signing and contents of this letter of intent;
PROVIDED FURTHER, that any public announcement of the signing and contents
of this letter of intent shall be reviewed, agreed upon and approved by
both TTA and Arcada prior to any distribution.
Except as otherwise set forth above, the parties agree to keep this
letter of intent and the proposal contained herein confidential until the
consummation of the transactions contemplated by this letter of intent or
the expiration of the forty-five (45) day period referred to in the
paragraph immediately above.
It is understood that Arcada's and TTA's legal obligations with
respect to consummating the merger transaction shall flow solely and
exclusively from the definitive documentation contemplated by this letter
of intent. Arcada and TTA agree to proceed promptly in the preparation of
such documentation.
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Touch Tone America
August 22, 1996
Page 4
All due diligence, accounting, and legal costs and expenses incurred
in connection with the transactions contemplated herein shall be borne
independently by the party incurring said costs and expenses.
This letter of intent may be executed in counterpart and shall be
governed by the laws of the State of Washington.
If the foregoing correctly sets forth our understanding with respect
to the subject matter hereof, please sign and return to Arcada a copy of
this letter of intent indicating your agreement.
Very truly yours,
ARCADA COMMUNICATIONS, INC.
By /s/ FRANK BONADIO
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Frank Bonadio, President
Accepted and agreed to as of
August 22, 1996
TOUCH TONE AMERICA, INC.
By /s/ MICHAEL J. CANNEY
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Name: Michael J. Canney
Title: President and CEO
