Log On America

One Cookson Place
Providence, RI 02903
401-459-6550; fax 401-459-6222
e-mail: invest@loa.com
Employees: 154

Troubled Log On America, at one time a company with stock trading in the mid 20s,
is the subject of a Securities and Exchange Commission investigation into an offer
and sale of the company’s securities. The company maintains that none of its current
officers or directors has sold any of their securities to date. Meanwhile, the
company has been embroiled in a law suit it filed against Promethean Asset Management
and several others, alleging insider trading and stock manipulation and short
sales of Log On’s common stock; and against Credit Suisse First Boston Corp.,
seeking $100 million for what Log On alleges is gross negiligence and material
conflicts of interest of its exclusive financial advisor.

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The company is also the subject of a law suit brought last September by Belenos,
Inc., which maintains Log On America owes it money for work that Belenos performed
and for use of its equipment. In the latest quarter, ending March 31, the company
reported revenues of $3,644,976 compared to $2,388,357 for the same period a year
ago. Net loss for the quarter was $4,740,600 compared to $2,710,296.

Stock Information
Exchange: Nasdaq
Symbol: LOAX
Annual meeting: May 29, 2001
Shares of common stock outstanding as of Thursday, May 31, 2001: 8,800,000
Stock price as of Monday, June 4, 2001: $0.40
Market value as of Monday, June 4, 2001: $3,520,000
12-month high stock price: $6.88
12-month low stock price: $0.25

Operating Results

Directors

David R. Paolo, 33, director since 1998, chairman, president and chief
executive officer of the company. Shares: 2,681,700

Raymond E. Paolo, 55, director since 1998, executive vice president of
the company. Shares: 367,500

Kenneth M. Cornell, 32, director since 1999, chief financial officer of
the company. Shares, 456,500

Charles F. Cleary, 53, director since 2000, chief operating officer of
the company. Shares: 161,750

Robert Annunziata, 53, director since 2000, chairman of the board of Velocita
Corp., and former chief executive officer of Global Crossing. Shares: 620,200

David M. Robert, 39, director since 1999, senior vice president of sales
and marketing for Jasmine Networks, an optical network equipment provider. Shares:
28,834

Joseph R. Paolino, 46, director since 2001, owner and partner of Paolino
Properties, a real estate development and management firm. Shares: 1,500

Jerry M. Hultin, 58, director since 2001, dean of the Wesley J. Howe School
of Technology Management at the Stevens Institute of Techonology. Shares: 0

Directors’ fees
Each non-employee director receives a $2,500 attendance fee for each meeting of
the board of directors attended in person, or $1,000 if attended by conference
call.

Top institutional holders
Hathaway & Associates Ltd., 65,900 shares;
Northern Trust Corp., 17,432 shares;
Legg Mason, Inc., 10,000 shares.

Executive compensation

(1) David Paolo’s 2000 compensation includes a bonus of $178,750, which
he used as an offset to an Aug. 16, 2000 promissory note in the amount of $500,000,
secured by a pledge from Paolo of 500,000 shares of commons stock. Since Paolo
chose to apply the bonus to the note, the balance is $321,250, and the pledge
is reduced to 321,250 shares. Additionally on May 15, 1998 David Paolo executed
a promissory note for $77,617, in which the company agreed to forgive 25 percent
of the principal amount of the note each year.

Source: Proxy statement, annual report, quarterly reports, and other PBN
research