<PAGE>
As filed with the Securities and Exchange Commission on May 25, 2000
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NETLOJIX COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 87-0378021
(State of incorporation) (I.R.S. Employer Identification No.)
501 Bath Street
Santa Barbara, CA 93101
(805) 884-6300
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Anthony E. Papa
Chairman of the Board of Directors
Chief Executive Officer
NetLojix Communications, Inc.
501 Bath Street
Santa Barbara, CA 93101
(805) 884-6300
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------
COPIES TO:
Philip J. Niehoff Thomas N. Harding
Mayer, Brown & Platt Seed, Mackall & Cole LLP
190 South LaSalle Street 1332 Anacapa Street, Suite 200
Chicago, Illinois 60603 Santa Barbara, CA 93101
(312) 782-0600 (805) 963-0669
------------
<PAGE>
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions and the Selling Stockholder.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the
following box: / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box: / X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum
Securities to Be Amount to be Offering Price Per Aggregate Offering Amount of
Registered Registered(1) Share Price Registration Fee
---------- ------------- ----- ----- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share 375,000 $2.50(2) $937,500 $248
75,000(3) $5.25(4) $393,750 $104
----
Total $352
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act, this Registration
Statement also covers such additional shares of Common Stock as may
become issuable to prevent dilution resulting from stock splits, stock
dividends and similar events.
(2) Estimated solely for the purpose of computing the registration fee
required by Section 6(b) of the Securities Act and computed pursuant to
Rule 457(c) under the Securities Act, based upon the average of the
high and low sales prices of the Registrant's Common Stock on May 24,
2000, as reported by The Nasdaq SmallCap Market.
<PAGE>
(3) Issuable upon the exercise of currently outstanding warrants (the
"Warrants").
(4) Calculated pursuant to Rule 457(g) under the Securities Act, based upon
the highest price at which the Warrants are exercisable.
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, as amended, or until the Registration Statement shall
become effective on such date as the Securities and Exchange Commission, acting
pursuant to such Section 8(a), may determine.
<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDER MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 25, 2000
PROSPECTUS
450,000 SHARES
NETLOJIX COMMUNICATIONS, INC.
COMMON STOCK
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The selling stockholder named in this prospectus is offering and
selling up to 450,000 shares of the common stock. It currently owns 375,000
of those shares and may acquire up to an additional 75,000 shares upon
exercise of warrants.
The selling stockholder may offer the shares from time to time in
public or private transactions on or off The Nasdaq SmallCap Market, at
prevailing market prices or privately negotiated prices. It may make sales
through brokers, dealers or other agents who may receive compensation in the
form of commissions, discounts or concessions.
NetLojix will not receive any proceeds from the sale of the common
stock, but NetLojix will receive the exercise price of the warrants. NetLojix
will pay the cost of registering the shares and various related expenses, but
the selling stockholder is responsible for all selling commissions, transfer
taxes and other such costs.
NetLojix's common stock is quoted on The Nasdaq SmallCap Market
under the symbol "NETX." On May 24, 2000, the closing sales price of
NetLojix's common stock on The Nasdaq SmallCap Market was $2.56.
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PURCHASE OF THE COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary
is a criminal offense.
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The date of this prospectus is __________, 2000
<PAGE>
NETLOJIX
NetLojix is an eBusiness enabler providing advanced Internet, data,
and voice connectivity, technical support and application hosting services to
the mid-size business market. We are a single-source provider of enterprise
network solutions integrating our complete portfolio of broadband
connectivity; applications development and hosting; and system integration
and maintenance. Our offices and support teams provide design, implementation
and management of wide area networks (WANs), local area networks (LANs) and
electronic commerce or "eBusiness" solutions, including frame relay, digital
subscriber line (DSL), Internet-based virtual private networks (iVPN), voice
products transported via the Internet Protocol (VOIP) and Internet access. We
offer these services on a stand-alone basis or bundled as part of a total
solution. We also provide Internet access and email services under the
recognized brands of Silicon Beach and WestNet to approximately 10,000
customers through DSL, ISDN, Frame Relay, wireless microwave, dial-up, and
cable modem access on the central coast of California.
NetLojix's principal executive offices are located at 501 Bath
Street, Santa Barbara, California 93101, and NetLojix's telephone number is
(805) 884-6300.
FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus may contain
forward-looking statements. Such statements can be identified by the use of
forward-looking terminology such as "may," "will," "expect," "believe,"
"intend," "anticipate," "estimate," "continue" or similar words. These
statements discuss future expectations, estimate the happening of future
events or NetLojix's financial condition or state other "forward-looking"
information. When considering such forward-looking statements, you should
keep in mind the risk factors and other cautionary statements in this
prospectus and the documents that NetLojix incorporates by reference. The
risk factors noted in this prospectus, and other risks and uncertainties,
could cause NetLojix's actual results to differ materially from those
contained in any forward-looking statement.
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING
FACTORS, TOGETHER WITH OTHER INFORMATION CONTAINED OR REFERENCED IN THIS
PROSPECTUS, IN EVALUATING AN INVESTMENT IN THE COMMON STOCK.
WE HAVE EXPERIENCED SIGNIFICANT LOSSES FROM CONTINUING OPERATIONS IN EACH OF
THE LAST THREE YEARS AND EXPECT TO CONTINUE TO EXPERIENCE LOSSES FOR THE
FORESEEABLE FUTURE
We have incurred significant losses from continuing operations in
each of the last three years and we expect to continue to lose money for the
foreseeable future. We have not generated enough revenue to offset the
substantial amounts that we have spent to grow our business, and we plan to
continue to incur significant expenses.
2
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WE MAY NEED TO RAISE ADDITIONAL CAPITAL
Historically, our cash flow from operations, our secured borrowings,
our private placements and our equity line agreement with Cambois Finance,
Inc. have been sufficient to meet working capital and capital expenditure
requirements. On March 3, 2000 we raised $1.5 million through the private
offering described in this prospectus. See "The Private Offering." In March,
2000, we restructured our secured credit facility with Coast Business Credit.
Currently no amount is outstanding under the credit facility.
We believe that our cash flow from operations, our equity line
agreement and our secured line of credit with Coast Business Credit are
sufficient to meet our working capital requirements from our current
operations into the foreseeable future. However, our ability to raise capital
by putting common stock to Cambois Finance under the equity line agreement is
subject to the satisfaction of several conditions. Additionally, we have
historically grown our business through mergers and acquisitions. Over the
past year we have been limited in our ability to attract acceptable
acquisition candidates because of our low stock price and lack of capital
resources. We believe that we will need to raise additional capital in order
to grow our business through acquisitions.
THE STOCK PRICE IS VOLATILE
Our common stock has been traded on The Nasdaq SmallCap Market since
May 28, 1998. The trading volume of the common stock has been variable, but
often low. As a result, relatively small trades may significantly affect the
market price of the common stock. The market price of the shares of common
stock has been highly volatile and may be significantly affected by factors
such as actual or anticipated fluctuations in our operating results,
announcements of potential acquisitions, changes in regulations, activities
of the largest domestic providers, industry consolidation and mergers,
conditions and trends in the market, adoption of new accounting standards
affecting the industry, changes in recommendations and estimates by
securities analysts, general market conditions and other factors. In
addition, the stock market has from time to time experienced significant
price and volume fluctuations that have particularly affected the market
prices for the shares of emerging growth companies like NetLojix. Many of
these factors are beyond our control.
THE MARKET PRICE OF OUR COMMON STOCK WOULD BE ADVERSELY AFFECTED IF WE WERE
DELISTED FROM THE NASDAQ SMALLCAP MARKET BECAUSE WE FAILED TO CONTINUE TO
MEET THE LISTING STANDARDS
On November 19, 1999, The Nasdaq Stock Market Inc. notified us that
we no longer met the minimum requirements for net tangible assets and market
capitalization for continued listing on The Nasdaq SmallCap Market. As a
result, The Nasdaq Stock Market threatened to delist our common stock.
Although we were able to bring NetLojix back into compliance with the listing
3
<PAGE>
requirements prior to being delisted, and are currently in compliance with
the listing requirements, there can be no assurance that NetLojix will
continue to meet The Nasdaq SmallCap Market's listing requirements in the
future. If our common stock were delisted, the price of the common stock
would, in all likelihood, decline. We are currently in full compliance with
the listing requirements for the Nasdaq SmallCap Market.
WE ARE A DEFENDANT IN A SECURITIES CLASS ACTION LITIGATION
On November 12, 1998, we experienced an unusual upsurge in our stock
price and trading volume. This unusual event has triggered the initiation of
class action litigation under the federal securities laws. We have reached an
agreement in principle to settle this lawsuit. However, a definitive
settlement agreement has not yet been finalized or executed. The settlement
must still be approved by the court. We believe that these claims are without
merit, and if the settlement is not approved, we would continue to defend
vigorously this litigation. However, it is not possible at this time for us
to predict with certainty the outcome of this litigation. Our operating
results, financial condition and liquidity could be adversely affected if the
agreement in principle to settle this litigation is not finalized and there
is an unfavorable outcome of this litigation. Even if we prevail in the
litigation, the expenses of the defense could have a material adverse effect
on our operating results and financial condition.
WE MAY NOT BE ABLE TO COMPETE SUCCESSFULLY
We have only recently begun to integrate our services under a single
enterprise network solutions offering. Previously, our telecommunications
services, IT services, Internet services and applications hosting services
were marketed separately under separate company names and marketing channels.
We believe there are significant opportunities for our single source strategy
for the mid-sized business. However, the industries in which we compete are
intensely competitive and subject to rapid change.
We compete with telecommunications services providers, technical
support providers, web development companies and other Internet service
providers. Within the telecommunications industry, competitors include
facilities-based and non-facilities-based providers, many of which have
substantially more resources than us. Providers compete on the basis of
price, customer service, transmission quality, breadth of service offerings
and value-added services.
The technical support industry is characterized by numerous
competitors offering one or more services that we provide. We compete with PC
vendors and PC resellers for maintenance and extended warranty services and
large IT consulting firms for our "help" desk and IT facilities management
services. In addition, there are numerous small companies that compete
effectively for technical support services within one or more industry
specific niche markets or geographic areas. Certain competitors are
substantially larger than we are and have greater financial, technical,
service, and marketing resources.
4
<PAGE>
We also compete with all Internet service providers that provide web
hosting and design. Many of our competitors are substantially larger than we
are and have substantially greater financial, infrastructure and personnel
resources than we have. Furthermore, many of our competitors have well
established large and experienced marketing and sales capabilities and
greater name recognition.
WE MUST KEEP PACE WITH TECHNOLOGICAL CHANGE TO REMAIN COMPETITIVE
Our business is in a period of rapid technological evolution, marked
by the introduction of competitive product and service offerings, such as the
use of the Internet for international voice and data communications, the use
of the web for business connectivity and rapidly changing commercial uses of
the Internet. Our future success depends, in part, on our ability to use
leading technologies effectively, to develop technological expertise, to
enhance existing services and to develop new services that meet changing
customer needs on a timely and cost-effective basis. We are unable to predict
which technological developments will challenge our competitive position or
the amount of expenditures that will be required to respond to a rapidly
changing technological environment. If we fail to respond in a timely and
effective manner to new and evolving technologies it could have a negative
impact on our operating results and financial condition.
WE ARE DEPENDENT ON TELECOMMUNICATIONS CARRIERS AND OTHER SUPPLIERS
We rely on traditional telecommunications carriers to transmit our
traffic over local and long distance networks. These networks may experience
disruptions that are not easily remedied. In addition, we depend on certain
suppliers of hardware and software. If the suppliers fail to provide network
services, equipment or software in the quantities, at the quality levels, at
the prices or at the times we require, it will be difficult for us to provide
services.
REGULATORY AND LEGAL UNCERTAINTIES COULD HARM OUR BUSINESS
Our business is subject to various federal and state laws,
regulations, agency actions and court decisions, some of which impose prior
certification, notification, registration and/or tariff requirements.
NetLojix Telecom, Inc., a subsidiary of NetLojix, has obtained Section 214
authority from the Federal Communications Commission and operating authority
from 41 states. NetLojix Telecom has applications for operating authority
pending in 8 other states. Certificates of authority can generally be
conditioned, modified or revoked by state regulatory authorities for failure
to comply with state laws and regulations. Fines and other penalties may be
imposed. The loss of a certificate of authority or the imposition of fines or
other penalties could have a material effect on our business, operating
results and financial condition. In addition, future changes in any of these
sources of regulation could have a material adverse effect on our business,
operating results and financial condition.
5
<PAGE>
OUR EXECUTIVE OFFICERS, DIRECTORS AND EXISTING STOCKHOLDERS WILL HAVE THE
ABILITY TO EXERCISE SIGNIFICANT CONTROL
Executive officers, directors and members of their families
beneficially own, in the aggregate, approximately 52% of our common stock.
Although this percentage will decrease if we sell common stock to Cambois
Finance under the equity line agreement, these stockholders will be able to
exercise control over all matters requiring approval by our shareholders,
including the election of directors and the approval of significant corporate
transactions. This concentration of ownership may also have the effect of
delaying or preventing a change of control, which could negatively affect the
stock price.
FUTURE SALES OF COMMON STOCK MAY NEGATIVELY AFFECT OUR STOCK PRICE
If requested by certain shareholders, we are required to register
for resale 6,457,123 shares of common stock that are held by executive
officers and directors of NetLojix, members of their families and certain
charitable foundations, pursuant to a registration rights and lockup
agreement. The market price of our common stock could decline as a result of
sales of a large number of shares of NetLojix common stock in the market, or
the perception that such sales could occur. These sales might also make it
more difficult for us to sell equity securities in the future at a time that
we consider appropriate.
THE ISSUANCE OF SHARES UNDER THE EQUITY LINE AGREEMENT MAY DILUTE OUR COMMON
STOCKHOLDERS AND ADVERSELY AFFECT THE STOCK PRICE
On April 23, 1999, we entered into an equity line agreement with
Cambois Finance, Inc., a British Virgin Islands Corporation engaged in the
business of investing in publicly-traded equity securities. Under the equity
line agreement, subject to the satisfaction of certain conditions, we may
issue or sell, from time to time, up to an aggregate of $13,500,000, after
deducting discounts, of our common stock. As of May 24, 2000, NetLojix had
sold a total of $2,000,000 of common stock to Cambois Finance under the
equity line agreement. The equity line agreement provides that the number of
shares that can be put to Cambois Finance is based on a floating rate that
will be below the market price of the common stock. As a result, the lower
the stock price goes, the more common stock that Cambois Finance receives.
The following table illustrates the number of shares that NetLojix would be
required to issue if it chooses to raise additional capital under the equity
line, at various assumed prices pursuant to the equity line agreement,
subject to the limitations described in the text following the table, and the
percentage of outstanding stock that would be owned by existing stockholders
as a result of the issuance of NetLojix common stock at the indicated price.
NetLojix is not obligated to put shares to Cambois under the terms of the
equity line agreement. The option to draw funds is purely that of NetLojix.
The table is for illustrative purposes only, and you should not assume that
it represents NetLojix's "best guess" of the range of future prices.
6
<PAGE>
<TABLE>
<CAPTION>
Assumed Shares Issuable under the Ownership of Existing
NetLojix Low Closing Equity Line Stockholders as a Result of
Bid Price(1) Agreement Share Issuance(2)
--------- --------- --------------
<S> <C> <C>
$0.5391 23,969,482 35.86%
$1.0782 11,984,741 52.79%
$1.6172 7,989,827 62.65%
$2.1563(3) 5,992,370 69.10%
$2.6954 4,793,896 73.65%
$3.2345 3,994,914 77.03%
$3.7735 3,424,212 79.65%
</TABLE>
- ----------
(1) NetLojix does not have the right to put common stock to Cambois unless
the low closing bid price determined at the date of the put is at least
$2.26.
(2) Based on 13,399,300 shares outstanding on May 5, 2000.
(3) Low closing bid price for a share of NetLojix common stock on May 24,
2000.
Notwithstanding the conversion formulas, in order to comply with the
listing requirements of the Nasdaq SmallCap Market the equity line agreement
provides that, without a vote of NetLojix's common stockholders, NetLojix may
not issue more than 2,103,939 shares of common stock in the aggregate to
Cambois Finance under the equity line, which number of shares is equal to
19.96% of the outstanding shares of NetLojix common stock on the date of the
equity line agreement. As of May 24, 2000, NetLojix had sold a total of
1,066,725 shares to Cambois Finance under the equity line agreement. As a
result, NetLojix could sell up to an additional 1,037,214 shares to Cambois
Finance. In order to issue shares in excess of that amount under the equity
line agreement, NetLojix would have to register additional shares with the
Securities and Exchange Commission, as well as obtain stockholder approval.
The significant downward pressure on the price of the common stock
as a result of sales by Cambois Finance could encourage short sales. This
could exert further downward pressure on the price of NetLojix common stock.
WE ARE DEPENDENT ON KEY MANAGEMENT PERSONNEL FOR OUR FUTURE SUCCESS
Our success depends to a significant degree upon the efforts of
senior management personnel, in particular, Anthony E. Papa, Chairman and
Chief Executive Officer, and James P. Pisani, President and Chief Operating
Officer. The departure of any officers or key employees could materially
adversely affect our ability to implement our business plan.
WE MAY NOT BE ABLE TO HIRE AND RETAIN QUALIFIED EMPLOYEES
7
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We believe that our future success will depend in large part upon
our continuing ability to attract and retain highly skilled personnel.
Competition for qualified, high-level telecommunications, data and networking
personnel is intense and there can be no assurance that we will be successful
in attracting and retaining qualified personnel. The loss of the services of
one or more of our key individuals, or failure to attract and retain other
key personnel, could materially adversely affect our business, operating
results and financial condition.
WE MAY NOT BE ABLE TO SUCCESSFULLY MAKE ACQUISITIONS OF OTHER COMPANIES
An important component of our past growth has been to develop our
business through acquisitions. This growth strategy is dependent on the
continued availability of suitable acquisition candidates and subjects us to
a number of risks. Acquisitions may place significant demands on our
financial and management resources, as the process for integrating acquired
operations presents a significant challenge to management and may lead to
unanticipated costs or a diversion of management's attention from day-to-day
operations. There can be no assurance that we will be able to successfully
integrate into its operations any acquisitions it makes in the future.
THE PRIVATE OFFERING
On March 3, 2000, NetLojix sold 375,000 shares of its common stock
to AMRO International, S.A., an entity organized under the laws of Panama
(the "selling stockholder"), for an aggregate purchase price of $1,500,000.
NetLojix also issued the selling stockholder warrants to purchase up
to 75,000 shares of common stock at an exercise price of $5.25 per share,
subject to adjustment in the event of stock dividends, stock splits and the
like. The warrants may be exercised beginning September 1, 2000, and
terminate on March 1, 2003.
NetLojix and the selling stockholder entered into a registration
rights agreement that requires NetLojix to file, and obtain and maintain the
effectiveness of, the registration statement containing this prospectus with
the Securities and Exchange Commission in order to register the public resale
of all shares of the common stock acquired by the selling stockholder (a) in
the private offering, and (b) upon exercise of the warrants. NetLojix will be
subject to significant monetary penalties if it fails to obtain or maintain
the effectiveness of such registration statement.
8
<PAGE>
USE OF PROCEEDS
All of the shares are being offered for the account of the selling
stockholder. NetLojix will not directly receive any proceeds from the sale of
these shares; however, NetLojix could receive aggregate proceeds of up to
$393,750 from the exercise of the warrants, if exercised in full. The actual
amount received, if any, will equal the number of shares purchased,
multiplied by the exercise price of the warrant ($5.25 per share). The
warrants are exercisable by the selling stockholder in its sole discretion.
NetLojix cannot predict whether or when the selling stockholder will exercise
the warrants. NetLojix will use any proceeds received from the exercise of
the warrants for working capital and general corporate purposes.
THE SELLING STOCKHOLDER
The following table sets forth, as of the date of this prospectus,
the number of shares of common stock beneficially owned by the selling
stockholder, the number of shares of common stock that the selling
stockholder may offer from time to time by this prospectus, and the number of
shares of common stock to be beneficially owned by the selling stockholder
upon completion of the offering. The selling stockholder may elect to sell
some, all or none of the shares offered hereby, in its sole discretion.
NetLojix is unable to predict the actual number of shares which will be sold
by the selling stockholder. The selling stockholder has not held any position
or office or had a material relationship with NetLojix or any of its
affiliates within the past three years other than as a result of the
ownership of NetLojix's common stock.
Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock issuable to that person upon exercise of any option or
similar right within sixty days following the date of this prospectus are
deemed outstanding. The selling stockholder has advised NetLojix that it has
sole voting and sole investment power with respect to the shares set forth
below. The percentage of beneficial ownership in this table is based upon
13,399,300 shares of the common stock outstanding.
This table assumes that the selling stockholder exercises all of the
warrants, and sells all of the common stock issued upon such exercise.
<TABLE>
<CAPTION>
- --------------------------------------- ---------------------------- ----------------- --------------------------
SHARES OFFERED SHARES BENEFICIALLY
BY THIS OWNED AFTER
SHARES BENEFICIALLY OWNED PROSPECTUS (1) OFFERING
- --------------------------------------- -------------- ------------- -------------- -----------
SELLING STOCKHOLDER NUMBER PERCENT NUMBER PERCENT
- --------------------------------------- -------------- ------------- ----------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
AMRO International, S.A. (2) 375,672(3) 2.8% 450,000 672 0
- --------------------------------------- -------------- ------------- ----------------- -------------- -----------
</TABLE>
- -------------------
(1) Represents the number of shares of common stock owned by the selling
stockholder, together with the number of shares of common stock
issuable upon exercise of the selling stockholder's warrants.
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<PAGE>
(2) AMRO International, S.A. is an investment account managed by Ultra
Finanz, a Swiss investment management company. The sole authorized
signatories at Ultra Finanz responsible for the AMRO account are H.U.
Bachofen and Michael Klee. Ultra Finanz and Messrs. Bachofen and Klee
may be deemed to be the beneficial owners of the shares held by AMRO.
The address of the principal business office of AMRO is c/o Ultra
Finanz, Grossmunster Platz 6, Zurich CH 8022 Switzerland.
(3) Includes 672 shares subject to warrants which are currently
exercisable, which warrants were granted to AMRO International in
connection with a separate financing in April 1999. The warrants to
purchase 75,000 shares received by AMRO International in the private
offering described in this prospectus are not exercisable until
September 1, 2000, and are not reflected in the amount in this column.
PLAN OF DISTRIBUTION
The common stock covered by this prospectus may be offered and sold
from time to time by the selling stockholder. The selling stockholder will
act independently of NetLojix in making decisions with respect to the timing,
manner and size of each sale. The selling stockholder may sell the common
stock being offered hereby on The Nasdaq SmallCap Market, or otherwise, at
prices and under terms then prevailing or at prices related to the then
current market price or at negotiated prices. There can be no assurance that
the selling stockholder will sell all or any of the shares offered by this
prospectus.
NetLojix is registering the common stock for resale by the selling
stockholder in accordance with registration rights granted to the selling
stockholder. See "The Private Offering." NetLojix will pay all expenses
incident to the offering and sale of the common stock to the public other
than any commissions and discounts of underwriters, dealers or agents, the
fees and disbursements of counsel representing the selling stockholder or any
underwriter or agent acting on behalf of a selling stockholder, and any
transfer taxes. In addition, NetLojix has agreed to indemnify the selling
stockholder, and each person who controls the selling stockholder, against
certain liabilities, including liabilities under the Securities Act of 1933,
in connection with the offering. The selling stockholder has agreed to
indemnify NetLojix and its directors and officers, as well as any person
controlling NetLojix, against certain liabilities, including liabilities
under the Securities Act of 1933.
The common stock may be sold by one or more of the following means
of distribution:
* a block trade in which the broker-dealer so engaged will
attempt to sell shares as agent, but may position and resell a
portion of the block as principal to facilitate the
transaction;
* purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this prospectus;
* an over-the-counter distribution in accordance with the rules
of The Nasdaq SmallCap Market;
* ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
* in privately negotiated transactions.
10
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To the extent required, this prospectus may be amended and supplemented from
time to time to describe a specific plan of distribution.
In connection with distributions of the common stock or otherwise,
the selling stockholder may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with such
transactions, broker-dealers or other financial institutions may engage in
short sales of NetLojix's common stock in the course of hedging the positions
they assume with selling stockholder. The selling stockholder may also sell
NetLojix's common stock short and redeliver the shares to close out such
short positions. The selling stockholder may also enter into option or other
transactions with broker-dealers or other financial institutions which
require the delivery to such broker-dealer or other financial institution of
shares offered hereby, which shares such broker-dealer or other financial
institution may resell pursuant to this prospectus (as supplemented or
amended to reflect such transaction). The selling stockholder may also pledge
shares to a broker-dealer or other financial institution, and, upon a
default, such broker-dealer or other financial institution, may effect sales
of the pledged shares pursuant to this prospectus (as supplemented or amended
to reflect such transaction). In addition, any shares that qualify for sale
pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to this
prospectus.
In effecting sales, brokers, dealers or agents engaged by the
selling stockholder may arrange for other brokers or dealers to participate.
Brokers, dealers or agents may receive commissions, discounts or concessions
from the selling stockholder in amounts to be negotiated prior to the sale.
Such brokers or dealers and any other participating brokers or dealers may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933
in connection with such sales, and any such commissions, discounts or
concessions may be deemed to be underwriting discounts or commissions under
the Securities Act of 1933. The selling stockholder may indemnify any
broker-dealer that participates in transactions involving the sale of the
shares against certain liabilities, including liabilities arising under the
Securities Act of 1933.
In order to comply with the securities laws of certain states, if
applicable, the shares must be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
NetLojix has advised the selling stockholder that the
anti-manipulation rules of Regulation M under the Exchange Act of 1934 may
apply to sales of common stock in the market and to the activities of the
selling stockholder and its affiliates. In addition, NetLojix will make
copies of this prospectus available to the selling stockholder and has
informed it of the need for delivery of copies of this prospectus to
purchasers at or prior to the time of any sale of the shares offered hereby.
11
<PAGE>
At the time a particular offer of shares is made, if required, a
prospectus supplement will be distributed that will set forth the number of
shares being offered and the terms of the offering, including the name of any
underwriter, dealer or agent, the purchase price paid by any underwriter, any
discount, commission and other item constituting compensation, any discount,
commission or concession allowed or reallowed or paid to any dealer, and the
proposed selling price to the public.
NetLojix has agreed with the selling stockholder to keep the
registration statement of which this prospectus constitutes a part effective
until all of the shares covered hereby have been sold or are eligible for
sale without restriction under Rule 144.
WHERE YOU CAN FIND MORE INFORMATION
NetLojix is subject to the reporting requirements of the Securities
Exchange Act of 1934. Accordingly, NetLojix files periodic reports, proxy
statements and other information with the Securities and Exchange Commission.
You may inspect or copy these materials at the Public Reference Room
maintained by the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington D.C. 20549. You may obtain information concerning the
operation of the Public Reference Room by calling the Securities and Exchange
Commission at 1-800-SEC-0330. NetLojix's filings are also available to the
public from the Commission's website on the Internet at http.//www.sec.gov.
NetLojix distributes to its stockholders annual reports containing audited
financial statements. You may also access information about NetLojix
electronically by means of its website at http.//www.netlojix.com.
NetLojix has filed with the Securities and Exchange Commission a
registration statement on Form S-3 with respect to the shares offered by this
prospectus. This prospectus does not contain all of the information included
in the registration statement. Please refer to the registration statement and
its exhibits, and to the documents incorporated by reference into the
registration statement, for further information about NetLojix and the shares
offered by this prospectus. You may obtain a copy of the registration
statement through the public reference facilities of the Securities and
Exchange Commission described above. You may also access a copy of the
registration statement electronically by means of the Securities and Exchange
Commission's website at http.//www.sec.gov.
The Securities and Exchange Commission allows NetLojix to
"incorporate by reference" the documents NetLojix files with it. This means
that NetLojix can disclose important information to you by referring to those
documents. The information incorporated by reference is considered to be part
of this prospectus. Documents that NetLojix files later with the Securities
and Exchange Commission will automatically update and supersede this
information. NetLojix incorporates by reference the documents listed below:
(1) NetLojix's Annual Report on Form 10-K for the year ended
December 31, 1999;
12
<PAGE>
(2) NetLojix's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000;
(3) The description of the common stock contained in NetLojix's
registration statement on Form 10-SB, filed with the
Securities and Exchange Commission on January 16, 1996, as
amended by the registration statements on Form 10-SB/A filed
on March 29 and May 28, 1996, and as further amended by the
definitive proxy statement on Schedule 14A, filed with the
Securities and Exchange Commission on October 30, 1997, in
connection with NetLojix's reincorporation in Delaware; and
(4) All reports and other documents NetLojix files with the
Securities and Exchange Commission under Section 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as
amended, after the date of this prospectus and prior to the
termination of this offering.
You may request a copy any document incorporated by reference into
this prospectus, at no cost, by writing or calling NetLojix at:
NetLojix Communications, Inc.
501 Bath Street, Santa Barbara, California 93101
Attention: Investor Relations
Telephone: (805) 884-6300.
This prospectus is part of a registration statement NetLojix filed
with the Securities and Exchange Commission.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon
by Seed, Mackall & Cole LLP, Santa Barbara, California, counsel to NetLojix.
EXPERTS
The consolidated financial statements and financial statement
schedule of NetLojix Communications, Inc. and subsidiaries at December 31,
1999 and 1998 and for each of the years in the three-year period ended
December 31, 1999, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
13
<PAGE>
You should rely only on the information or representations provided
in this prospectus or to which NetLojix has referred you. NetLojix has not
authorized anyone to provide you with different information. The common stock
will not be offered in any state where an offer is not permitted. You should
not assume that the information in this prospectus is accurate as of any date
other than the date on the cover of this prospectus.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
NetLojix ..........................................................2
Forward-Looking Statements .........................................2
Risk Factors .......................................................2
The Private Offering................................................8
Use of Proceeds ....................................................9
Selling Stockholder ................................................9
Plan of Distribution ..............................................10
Where You Can Find More Information................................12
Legal Matters .....................................................13
Experts ..........................................................13
</TABLE>
NETLOJIX COMMUNICATIONS, INC.
450,000 SHARES
OF
COMMON STOCK
------------------
PROSPECTUS
------------------
, 2000
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The Registrant will pay all expenses incident to the offering and
sale to the public of the shares being registered other than any commissions
and discounts of underwriters, dealers or agents, the fees and disbursements
of counsel representing the selling stockholder or any underwriter or agent
acting on behalf of the selling stockholder, and any transfer taxes. Such
expenses are set forth in the following table. All of the amounts shown are
estimates except the Securities and Exchange Commission registration fee and
The Nasdaq SmallCap Market additional listing fee.
<TABLE>
<S> <C>
SEC registration fee ................................................. $ 352
Nasdaq SmallCap Market additional listing fee ........................ 4,500
Legal fees and expenses............................................... 10,000
Accounting fees and expenses ......................................... 3,000
Printing expenses .................................................... 3,000
Transfer Agent expenses .............................................. 1,000
Miscellaneous expenses ............................................... 3,148
------
Total ....................... $25,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 145 of the Delaware General Corporation Law,
the Registrant's Certificate of Incorporation includes a provision that
eliminates the personal liability of its directors for monetary damages for
breach or alleged breach of their duty of care. In addition, as permitted by
Section 145 of the Delaware General Corporation Law, Article VI of the Bylaws
of the Registrant provides that: (i) the Registrant is required to indemnify
its directors and officers and persons serving in such capacities in other
business enterprises (including, for example, subsidiaries of the Registrant)
at the Registrant's request, to the fullest extent permitted by Delaware law,
including in those circumstances in which indemnification would otherwise be
discretionary; (ii) the Registrant may, in its discretion, indemnify
employees and agents in those circumstances where indemnification is not
required by law; (iii) the Registrant is required to advance expenses, as
incurred, to its directors and officers in connection with defending a
proceeding (except that it is not required to advance expenses to a person
against whom the Registrant brings a claim, approved by a majority of its
Board of Directors, which alleges willful misappropriation of corporate
assets, disclosure of confidential information, or any other willful and
deliberate breach in bad faith of such agent's duty to the Registrant or its
Stockholders); (iv) the rights conferred in the Amended and Restated Bylaws
are not exclusive, and the Registrant is authorized to enter into
indemnification agreements with its directors, officers and employees;
II-1
<PAGE>
and (v) the Registrant may not retroactively amend the Bylaw provisions in a
way that is adverse to such directors, officers and employees.
The indemnification provisions in the Bylaws may be sufficiently
broad to permit indemnification of the Registrant's directors and officers
for liabilities arising under the Securities Act.
ITEM 16. EXHIBITS
4.1 Form of stock certificate for common stock of the Registrant.
(Incorporated by reference to Exhibit 4.1 to Registrant's
Registration Statement on Form S-8 dated May 22, 1998).
4.2 Common Stock and Warrants Purchase Agreement dated as of March
2, 2000, between Registrant and AMRO International, S.A.
(Incorporated by reference to Exhibit 10.16 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1999)
4.3 Registration Rights Agreement dated as of March 2, 2000,
between Registrant and AMRO International, S.A. (Incorporated
by reference to Exhibit 10.17 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1999)
4.4 Stock Purchase Warrant granted by Registrant to AMRO
International, S.A. (Incorporated by reference to Exhibit
10.18 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999)
5 Opinion of Seed, Mackall & Cole LLP.
23.1 Consent of KPMG LLP.
23.2 Consent of Seed, Mackall & Cole LLP (included in Exhibit 5).
24 Power of Attorney (included on page II-5).
ITEM 17. UNDERTAKINGS
A. RULE 415 OFFERING
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
II-2
<PAGE>
(i) to include any prospectus required by Section
10(a)(3) Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) of
this undertaking do not apply if the information required to
be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to
the Securities and Exchange Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
B. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new
II-3
<PAGE>
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
C. REQUEST FOR ACCELERATION OF EFFECTIVE DATE
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant 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 of 1933 and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant 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 of 1933 and will be
governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to 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 for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Barbara, State of California,
on this 25th day of May, 2000.
NETLOJIX COMMUNICATIONS, INC.
By: /s/ ANTHONY E. PAPA
-----------------------------
Anthony E. Papa
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Anthony E. Papa and James P. Pisani, and each of them, as attorneys-in-fact,
each with the power of substitution, for him or her in any and all
capacities, to sign any amendment to this Registration Statement and to file
the same, with exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting to said
attorneys-in-fact, and each of them, full power and authority to do and
perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact or any of them, or their or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons on May 25,
2000, in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ ANTHONY E. PAPA Chairman of the Board, Chief
- ------------------------------------------ Executive Officer and Director
Anthony E. Papa (Principal Executive Officer)
/s/ JAMES P. PISANI President, Chief Operating Officer, Secretary
- ------------------------------------------ and Director
James P. Pisani
(Signatures continued on following page)
II-5
<PAGE>
/s/ MICHAEL J. USSERY Chief Financial Officer
- ------------------------------------------ (Principal Financial Officer and
Michael J. Ussery Principal Accounting Officer)
/s/ JOHN E. ALLEN Director
- ------------------------------------------
John E. Allen
/s/ JEFFREY J. JENSEN Director
- ------------------------------------------
Jeffrey J. Jensen
Director
- ------------------------------------------
Anthony D. Martin
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
4.1 Form of stock certificate for common stock of the Registrant.
(Incorporated by reference to Exhibit 4.1 to Registrant's
Registration Statement on Form S-8 dated May 22, 1998).
4.2 Common Stock and Warrants Purchase Agreement dated as of March
2, 2000, between Registrant and AMRO International, S.A.
(Incorporated by reference to Exhibit 10.16 to Registrant's
Annual Report on Form 10-K for the year ended December 31,
1999)
4.3 Registration Rights Agreement dated as of March 2, 2000,
between Registrant and AMRO International, S.A. (Incorporated
by reference to Exhibit 10.17 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1999)
4.4 Stock Purchase Warrant granted by Registrant to AMRO
International, S.A. (Incorporated by reference to Exhibit
10.18 to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1999)
5 Opinion of Seed, Mackall & Cole LLP.
23.1 Consent of KPMG LLP.
23.2 Consent of Seed, Mackall & Cole LLP (included in Exhibit 5).
24 Power of Attorney (included on page II-5).
II-7
<PAGE>
EXHIBIT 5
May 25, 2000
NetLojix Communications, Inc.
501 Bath Street
Santa Barbara, ca 93101
Re: Registration Statement on Form S-3
Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed
by NetLojix Communications, Inc. ("NetLojix") with the Securities and
Exchange Commission on or about the date hereof (the "Registration
Statement"). The Registration Statement relates to the resale by the selling
stockholder named therein (the "Selling Stockholder"), of an aggregate of up
to 450,000 shares of common stock, par value $.01 per share, of NetLojix's
common stock (collectively, the "Shares"). The Shares include (i) 375,000
Shares (the "Outstanding Shares") currently held by the Selling Stockholder,
and (ii) 75,000 Shares (the "Warrant Shares") issuable upon exercise of
warrants (the "Warrants") held by the Selling Stockholder.
In connection with the opinions expressed herein, we have examined,
among other things, certified copies of NetLojix's Certificate of
Incorporation and By-Laws, as amended to date, as well as records of
corporate proceedings and other actions taken by NetLojix in connection with
the issuance and sale of the Shares and the Warrants. We have also examined
the Warrants and the agreements between NetLojix and the Selling Stockholder
pursuant to which the Outstanding Shares and the Warrants were issued.
Based upon our examination of the foregoing, and such other matters
of fact or law as we have deemed necessary for purposes hereof, it is our
opinion that:
1. The Outstanding Shares are validly issued, fully paid and
non-assessable.
2. When issued and paid for upon exercise of the Warrant, in accordance
with the terms and conditions of the Warrants, the Warrant Shares will
be validly issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the reference to our firm in
the Prospectus contained in the Registration Statement under the heading
"Legal Matters."
Very truly yours,
/s/ SEED, MACKALL & COLE LLP
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
NetLojix Communications, Inc.:
We consent to the use of our report incorporated by reference herein
and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG LLP
Los Angeles, California
May 24, 2000
