<PAGE> 1
As Filed With the Securities and Exchange Commission on October 26, 1999
Registration No. ___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington. D.C. 20549
------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
DATUM INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-2512237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9975 TOLEDO WAY, IRVINE, CALIFORNIA 92618-1819
(949) 598-7500
(Address, including zip code, and telephone number, including area code of
registrant's principal executive offices)
------------
DAVID A. YOUNG
CHIEF FINANCIAL OFFICER
DATUM INC.
9975 TOLEDO WAY, IRVINE, CALIFORNIA, 92618-1819
(949) 598-7500
(Name, address, including zip code, and telephone number, including
area code of agent for service)
COPY TO:
LAWRENCE B. COHN, ESQ.
STRADLING YOCCA CARLSON & RAUTH,
A PROFESSIONAL CORPORATION
660 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
Approximate date of commencement of proposed sale to public: FROM TIME
TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are being 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, 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. [ ]
<PAGE> 2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================
Proposed maximum Proposed maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered (1) per share (2) offering price registration fee
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$0.25 par value 235,705 shares $6.78 $1,598,080 $445
===============================================================================================
</TABLE>
(1) The number of shares of the Registrant's common stock, $0.25 par value
(the "Common Stock") registered hereunder represents the product of (a)
214,277 shares, which were issued at the closing of the merger of
Digital Delivery, Inc. with and into a subsidiary of the Registrant (the
"Merger"), and (b) 110%. Pursuant to the merger agreement relating to
the Merger, the Registrant is obligated to issue additional shares of
its Common Stock on March 31, 2001 and March 31, 2002 based on certain
future performance criteria, and the amount of such shares, or any
meaningful estimate thereof, is indeterminable at this time. In the
event such additional shares aggregate in excess of the ten percent
margin provided for above, the Registrant will supplement or amend this
Registration Statement.
(2) The offering price is estimated solely for the purpose of calculating
the registration fee in accordance with Rule 457(c) using the average of
the high and low price reported by the Nasdaq National Market for the
Common Stock on October 19 1999, which was approximately $6.78 per
share.
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 Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE> 3
PROSPECTUS Dated October 26, 1999
(Subject to Completion)
DATUM INC.
235,705 SHARES OF COMMON STOCK
($0.25 PAR VALUE)
----------------
This prospectus relates to the offer and sale from time to time of up to
235,705 shares of our common stock which are held by certain of our current
stockholders named in this prospectus for their own benefit or by donees,
transferees, pledgees or other successors in interest of such stockholders that
receive such shares as a gift or other non-sale related transfer. The shares of
our common stock offered pursuant to this prospectus were issued to the former
stockholders of Digital Delivery, Inc., a Massachusetts corporation, pursuant to
an Agreement and Plan of Merger, dated as of July 29, 1999, among Datum, Datum
Acquisition Sub, Inc., a Massachusetts corporation and a wholly owned subsidiary
of Datum, Digital Delivery, and certain of Digital Delivery's stockholders.
The prices at which such stockholders may sell the shares in this
offering will be determined by the prevailing market price for the shares or in
negotiated transactions. We will not receive any of the proceeds from the sale
of the shares. We will bear all expenses of registration incurred in connection
with this offering. The stockholders whose shares are being registered hereby
will bear all selling and other expenses.
Our common stock is traded on the Nasdaq National Market under the
symbol "DATM." On October 25 1999, the last reported sale price of our common
stock was $7.00 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 2 TO READ ABOUT THE RISKS YOU SHOULD
CONSIDER CAREFULLY BEFORE BUYING SHARES OF OUR COMMON STOCK.
----------------
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT CONTAINING
THIS PROSPECTUS, WHICH HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, IS DECLARED 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.
----------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------
The date of this Prospectus is October __, 1999.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
About Datum............................................................................... 2
Risk Factors.............................................................................. 2
Where You Can Find Additional Information................................................. 10
Issuance of Common Stock to Selling Stockholders.......................................... 11
Use of Proceeds........................................................................... 12
Selling Stockholders...................................................................... 13
Plan of Distribution...................................................................... 14
Legal Matters............................................................................. 14
Experts................................................................................... 14
</TABLE>
ABOUT DATUM
We design, manufacture and market a wide variety of high-performance
time and frequency products used to synchronize the flow of information in
telecommunications networks and in numerous other applications. We serve the
markets for high-precision time and frequency devices in the telecommunications
industry, which is rapidly expanding as a result of the conversion from analog
to digital systems and the expansion of cellular and personal communications
services (PCS) networks. Our Efratom subsidiary invented the rubidium oscillator
in 1971 and currently supplies the majority of the high-precision rubidium
atomic clocks used in cellular and PCS network base stations in the United
States. We are a major supplier of extremely precise cesium standards and Global
Positioning System (GPS) receivers that generate or capture time and frequency
information for use in wireline telecommunications infrastructures.
In addition to providing time and frequency products for
telecommunications applications, we increasingly supply timing products used to
ensure the integrity of information transmitted through enterprise satellites,
including GPS satellites, which utilize our cesium clocks to provide highly
accurate timing and navigation information throughout the world. We also provide
time and frequency products and systems for a wide range of scientific and
industrial test and measurement applications, including missile guidance,
geographic mapping and electric utility operations, and through our E-Business
Solutions Division we provide precision timing solutions to the developing
e-commerce marketplace.
We were originally incorporated in California on March 2, 1959, and
reincorporated in Delaware on April 16, 1987. Our executive offices are located
at 9975 Toledo Way, Irvine, California 92618-1819, and our telephone number is
(949) 598-7500.
RISK FACTORS
In evaluating an investment in our common stock, you should carefully
consider the following risk factors and other information contained in or
incorporated by reference into this prospectus. Some information in this
prospectus may contain "forward looking" statements that discuss future
expectations of our financial condition and results of operations. The risk
factors noted in this section and other factors could cause our actual results
to differ materially from those contained in any forward-looking statements.
Such risks and uncertainties include:
2
<PAGE> 5
o our ability to design, develop, manufacture and market products;
o the continued commercial acceptance of our products;
o our ability to achieve new product commercialization;
o the anticipated growth of our target markets; and
o our ability to maintain profitability.
Although we believe that our current expectations are reasonable, we make no
representation regarding their accuracy. Therefore, you should avoid placing
undue reliance on the forward-looking statements contained in this prospectus.
OUR REVENUES DEPEND ON THE CONTINUED BUSINESS OF A SMALL NUMBER OF CUSTOMERS.
A small number of customers account for a substantial portion of our net
sales, and we expect this dependence on a limited number of customers to
continue for the foreseeable future. Our largest customer, Lucent, accounted for
approximately 34% and 38% of our net sales for the years ended December 31, 1998
and 1997, respectively. Further, our five largest customers, including Lucent,
accounted for approximately 52% and 58% of net sales during the same periods.
OUR DEPENDENCE ON A LIMITED AMOUNT OF CUSTOMERS INCREASES THE RISK THAT A DELAY
OR CANCELLATION OF AN ORDER WILL MATERIALLY IMPACT OUR REVENUES, AND GIVES THOSE
CUSTOMERS ADDITIONAL NEGOTIATING LEVERAGE.
We believe that our major customers continually evaluate whether to
purchase time and frequency products from other sources. Accordingly, we cannot
assure you that a major customer will not reduce, delay or eliminate its
purchases of our products. Any such reduction, delay or loss of orders could
materially adversely affect our business, results of operations and financial
condition. Our major customers also have significant negotiating leverage over
us and may attempt to change the terms, including pricing, upon which we do
business, which could materially adversely affect our business, results of
operations and financial condition. Under the terms of our supply agreement with
Lucent, we agreed to price reductions at specified times, most recently on July
1, 1999. In addition, many of our customers, including Lucent, are original
equipment manufacturers (OEMs) for telecommunications service providers. As
these OEM customers are pressured to reduce prices by such service providers, we
may be required to commit contractually to price reductions for our products
before we know how, or if, cost reductions can be obtained. If we are unable to
achieve such cost reductions, our gross margins could decline and such decline
could materially adverse affect our business, financial condition and results of
operations. Also, several of our larger customers, including Lucent and
Motorola, require us to continue to invest in statistical quality control
programs to measure, maintain, and improve quality standards. The costs related
to such programs may adversely affect our ability to deliver product within cost
expectations, in turn affecting our business, financial condition and results of
operations.
3
<PAGE> 6
OUR ACTUAL SHIPMENTS TO CUSTOMERS, AND THE REVENUES WE RECEIVE FOR SUCH
SHIPMENTS, MAY BE LESS THAN OUR FORECASTS PREDICT.
While we receive periodic order forecasts from our major customers,
certain of these customers have no obligation to purchase the forecasted
amounts. As a result of fluctuating market demand for our major customers'
products and those customers' attempts to minimize inventory, we have
experienced, and we expect to continue experiencing, rescheduling of shipments,
creating discrepancies between forecasted orders and actual shipments. Such
discrepancies have in the past resulted in significant increases in inventory
and necessitated significant reductions in our production staff. Specifically,
Lucent operates its factories under a "just-in-time" system of inventory control
to operate with a minimum of in-plant inventory. As a result, Lucent may from
time to time require many of its vendors, including us, to delay delivery of
product. Our contract with Lucent requires us to maintain significant
work-in-progress and finished goods inventory to meet forecasted orders. To the
extent Lucent or any of our other major customers do not purchase forecasted
amounts, we could have excess levels of inventory and production staff. Such an
excess of inventory or employees will increase our expenses and the amount of
our resources invested in working capital, will reduce our cash flow and may
increase the risk of product obsolescence, any of which results could materially
adversely affect our business, financial condition and results of operations. In
addition, the manufacturing process of many of our products requires significant
post-manufacture aging time. As a result, we may encounter difficulties
increasing production of many of our products on short notice. Our inability to
satisfy customer orders could have a material adverse effect on our
relationships with customers.
OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.
We have experienced, and we expect to continue to experience,
fluctuations in sales and operating results from quarter to quarter. As a
result, we believe that period-to-period comparisons of our operating results
are not necessarily meaningful, and that such comparisons cannot be relied upon
as indicators of future performance. In addition, we cannot assure you that we
will maintain profitability in the future. A significant component of such
quarterly fluctuations results from rescheduling of orders by our major
customers, in some cases due in part to our customers' attempts to minimize
their inventories. Other factors that could cause our sales and operating
results to vary significantly from period to period include:
o contractual price reductions on products sold to certain major
customers;
o the time, availability and sale of new products;
o changes in the mix of products having differing gross margins;
o variations in manufacturing capacities, efficiencies and costs;
o the availability and cost of components;
o warranty expenses; and
o variations in product development and other operating expenses.
4
<PAGE> 7
In addition, we have experienced seasonal fluctuations, in demand for our
products, resulting in increased sales in the fourth quarter, which we believe
is due to increased year-end spending by our OEM customers and a higher level of
sales activity in connection with year-end sales quotas. Accordingly, sales and
net income for the first quarter of a given fiscal year may reflect little or no
growth from the fourth quarter of the preceding fiscal year. In addition, many
of our products' sales cycles are often lengthy and unpredictable, ranging up to
36 months. Our quarterly results of operations are also influenced by
competitive factors, including pricing and availability of our and our
competitors' time and frequency products. A large portion of our expenses are
fixed and difficult to reduce in a short period of time. If net sales do not
meet our expectations, our fixed expenses would exacerbate the effect of such
net sales shortfall on net income. Furthermore, if we or our competitors
announce new products and technologies, our customers may choose to defer
purchases of our products. Order deferrals by our customers, delays in the
introduction of our new products and longer than anticipated sales cycles for
our products have in the past adversely affected our quarterly results of
operations. Due to all of the foregoing factors, as well as unanticipated
factors, it is likely that in some future quarter our operating results will be
below the expectations of public market analysts or investors. If that happens,
the price of our common stock may be materially adversely affected.
OUR SUCCESS DEPENDS ON THE CONTINUED GROWTH OF WIRELESS TELECOMMUNICATIONS
MARKETS.
We derive a substantial portion of our net sales from the sale of cesium
standards, rubidium oscillators and related systems for wireless communications
networks, and our future success depends to a considerable extent upon the
continued growth and increased availability of cellular and other wireless
communications services in the United States and internationally. We cannot
assure you that either subscriber use or the implementation of wireless
communications services will continue to grow, or that such growth will create
demand for our products. We believe that continued growth in the use of wireless
communications services depends on significant reductions in infrastructure
capital equipment cost per subscriber and corresponding reductions in wireless
service pricing. While the Federal Communications Commission has adopted
regulations requiring local phone companies to reduce the rates charged to
cellular carriers for connection to their wireline networks, we anticipate that
wireless service rates will remain higher than rates charged for traditional
wireline service, which may reduce the demand for wireless services and our
products. The growth in the implementation of wireless communications services
is also dependent upon both developed countries allowing continued deployment of
new networks and developing countries deploying wireless communications
networks, in both cases as opposed to, or in addition to, constructing wireline
infrastructures.
Several of our major customers, including Lucent, are suppliers to the
personal communications services (PCS) market. We believe that many of our PCS
network timing equipment customers are uncertain as to the rate of new sales in
their markets. As a result of such uncertainties, we anticipate that customer
orders, if any, will be unpredictable in size and frequency. Furthermore, even
if the PCS market does experience future growth, we cannot assure you that our
products will be widely utilized in PCS networks. In addition, some of our major
customers are developing wireless networks utilizing code division multiple
access (CDMA) technology. In the event that PCS technology does not gain
widespread acceptance or the PCS market comes to depend upon a competing
technology, our customers could reduce their demand for our products, which
could materially adversely affect our business, financial condition and results
of operations.
5
<PAGE> 8
OUR E-COMMERCE SOLUTIONS BUSINESS IS DEPENDENT ON THE DEVELOPMENT AND
MAINTENANCE OF THE WEB INFRASTRUCTURE.
The success of our new E-Commerce Solutions Division will depend largely
on the continued development and maintenance of e-commerce infrastructure. This
includes maintenance of a reliable network backbone with the necessary speed,
data capacity and security, as well as timely development of complementary
products such as high speed modems, for providing reliable e-commerce access and
services. The internet has experienced, and is likely to continue to experience,
significant growth in the numbers of users and amount of traffic. If the
internet continues to experience increased numbers of users, increased frequency
of use or increased bandwidth requirements, its infrastructure may be unable to
support the demands placed on it.
Because global commerce and the online exchange of information is new
and evolving, we cannot predict whether e-commerce will prove to be commercially
viable in the long term. In addition, e-commerce could lose its viability due to
delays in the development or adoption of new standards and protocols to handle
increased levels of activity or due to increased governmental regulation. The
infrastructure and complementary products or services necessary to make
e-commerce commercially viable for the long term may not be developed
successfully or in a timely manner. Even if these products or services are
developed, e-commerce may not become a viable commercial marketplace for
services such as those that our E-Business Solutions Division offers.
WE FACE CONSIDERABLE COMPETITION, INCLUDING COMPETITION FROM LARGER COMPANIES.
Intense competition exists among manufacturers of time and frequency
products, and we believe that competition in our markets from both new and
existing competitors will increase in the future. We compete principally in
several specialized market segments against a limited number of companies, some
of which are more established, enjoy higher name recognition and possess far
greater financial, technological and marketing resources than we do. We
currently compete principally on the basis of the performance and quality of our
products, including their reliability, as well as on price and timely
manufacture and delivery. In the cellular and PCS markets, we compete primarily
with Symmetricom, Inc. and with various other quartz oscillator manufacturers.
In the wireline market, we compete primarily with Symmetricom and Oscilloquartz
SA. In the enterprise computing market, we compete primarily with Tech-Sym
Corp., Odetics, Inc. and True-Time, Inc. In the cesium standards market, we
compete primarily with Hewlett-Packard and Frequency Electronics, Inc. In the
rubidium oscillators market, we compete primarily with Frequency Electronics,
Inc. In addition, certain companies, such as EG&G, Inc., that currently
manufacture products exclusively for use in military applications, could enter
commercial markets and compete directly with our business. We cannot assure you
that we will be able to compete successfully in the future against existing or
new competitors, that new technologies will not reduce the demand for our
products or that we will be able to adapt successfully to changes in the markets
served by our products. In addition, we cannot assure you that competitive
pressures will not cause us to reduce prices, which would negatively affect
gross margins.
6
<PAGE> 9
OUR INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE, AND THE NEW PRODUCTS WE
DEVELOP MUST BE COMPATIBLE WITH SUCCESSFUL EMERGING TECHNOLOGIES.
The telecommunications and enterprise computing markets, as well as the
other markets for our products, are characterized by rapidly changing
technology, evolving industry standards and new product introductions and
enhancements. Sales of our time and frequency products depend in part on the
continuing development and deployment of emerging telecommunications services
which require the precise time and frequency control our products offer. We
cannot assure you that new developments in telecommunications technology or the
introduction of new communications protocols will not reduce the demand for our
precise timing products. We depend significantly on our ability to enhance our
existing products and to develop and introduce innovative new products on a
timely basis that gain market acceptance. In addition, we are aware of other
research and product development being undertaken by other companies and by
academic institutions to evolve further smaller, lighter and less costly atomic
clocks. We cannot assure you that other time and frequency products
incorporating new technology, if and when available, will not be commercially
successful and materially adversely affect our results of operations.
Our products compete with alternative technologies being introduced in
the time and frequency markets. For example, our rubidium oscillators compete
primarily with less stable, lower-cost alternatives, such as GPS-disciplined
quartz oscillators offered by other suppliers as well as by us. In the event
that third parties are able to develop more stable quartz oscillators that are
competitive with our rubidium oscillators, our business, financial condition and
results of operations could be materially adversely affected. Symmetricom
currently markets a software enhanced quartz oscillator with performance
characteristics falling between a traditional quartz oscillator and our rubidium
oscillator, at a price lower than that of our product. In the event that
Symmetricom improves the performance of its product, our business, financial
condition and results of operations could be materially adversely affected.
Although we maintain an active development program to improve our
product offerings, we cannot assure you that such efforts will be successful,
that our new products will be developed on a timely basis and will achieve
customer acceptance or that our customers' products will achieve market
acceptance. Failure to develop, or introduce on a timely basis, new products or
product enhancements that achieve market acceptance could materially adversely
affect our business, operating results and financial condition. We cannot assure
you that we will be successful in selecting, developing, manufacturing and
marketing new products or enhancing our existing products on a timely or
cost-effective basis.
FUTURE MERGERS AND ACQUISITIONS MAY FAIL TO PRODUCE ANTICIPATED BENEFITS.
We plan to continue growing through strategic acquisitions of
complementary products, technologies and businesses. Successful implementation
of this strategy will be dependent upon our ability to identify and acquire
suitable acquisition candidates and manage and integrate the operations of such
acquisitions. Competition for acquisition candidates is intensifying within the
telecommunications industry and may result in the inflation of purchase prices
which exceed our financial capability or could otherwise inhibit our acquisition
program or adversely affect our business, financial condition and operating
results. In addition, we need the consent of our lenders to
7
<PAGE> 10
consummate any such acquisitions. We cannot assure you that we will be able to
identify and acquire suitable additional candidates. Furthermore, even if
additional acquisitions are consummated, we cannot assure you that we will be
successful in managing and integrating such acquisitions. In addition, growth
through acquisitions will place additional demands on our management and
resources.
OUR INTERNATIONAL OPERATIONS EXPOSE US TO CURRENCY FLUCTUATIONS.
In 1998, 1997 and 1996, international revenues accounted for
approximately 24%, 19% and 22%, respectively, of our net sales. We expect that
international revenues will continue to account for a significant percentage of
our net sales for the foreseeable future. Our foreign sales are generally
invoiced in U.S. dollars and, accordingly, we do not currently engage in foreign
currency hedging transactions. However, as we continue to expand our
international operations, we may be paid in foreign currencies and exposure to
losses in foreign currency transactions may increase. We may choose to limit
such exposure by the purchase of forward foreign exchange contracts or through
similar hedging strategies. We cannot assure you that any currency hedging
strategy would successfully avoid exchange-related losses. In addition, if the
relative value of the U.S. dollar in comparison to the currency of our foreign
customers should increase, the resulting effective price increase of our
products to such foreign customers could result in decreased sales, which could
materially adversely affect our business, results of operations and financial
condition.
OUR INTERNATIONAL OPERATIONS ENTAIL ADDITIONAL RISKS.
Conducting business internationally exposes us to the following
additional risks:
o greater difficulty administering our business globally;
o failure to comply successfully with multiple and potentially
conflicting regulatory requirements, such as export requirements,
tariffs and other barriers;
o failure to successfully comply with different health and safety
requirements;
o difficulty staffing and managing foreign operations;
o longer accounts receivable cycles;
o restrictions against the repatriation of earnings;
o export control restrictions;
o overlapping or differing tax structures; and
o political and economic instability.
We cannot assure you that any of the foregoing factors will not materially
adversely affect our business, results of operations and financial condition,
nor that foreign markets for our products will not develop more slowly than
currently anticipated. Foreign countries may decide not to construct wireless or
wireline communications systems, to place moratoriums on building base stations
or to terminate or
8
<PAGE> 11
delay construction of such systems for a variety of reasons, including
environmental issues, economic downturns, the availability of favorable pricing
for other communications services or the availability and cost of related
equipment. Any such action by foreign countries would reduce the market for our
products, which would materially adversely affect our business, results of
operations and financial condition.
WE RELY UPON INTELLECTUAL PROPERTY RIGHTS WHICH MAY BE INFRINGED.
Although we have patented certain aspects of our technology, we rely
primarily on trade secrets, copyrights and contractual provisions to protect our
proprietary rights. We cannot assure you that these protections will be adequate
to protect our proprietary rights, that others will not independently develop or
otherwise acquire equivalent or superior technology or that we can maintain such
technology as trade secrets. We also cannot assure you that patents we possess
will not be invalidated, circumvented or challenged. In addition, the laws of
some foreign countries do not protect our proprietary rights to the same extent
as do the laws of the United States. Our failure to protect our intellectual
property rights could materially adversely affect our business, operating
results and financial condition.
We cannot assure you that patent or other intellectual property
infringement claims will not be asserted against us in the future. Although
patent and intellectual property disputes may be settled through licensing or
similar arrangements, costs associated with such arrangements may be substantial
and we cannot assure you that necessary licenses would be available on
satisfactory terms or at all. Accordingly, an adverse determination in a
judicial or administrative proceeding or failure to obtain necessary licenses
could prevent us from manufacturing and selling the affected products, which
could have a material adverse effect on our business, financial condition and
results of operations. In addition, should we decide to, or be forced to,
litigate such claims, such litigation could be expensive and time consuming,
could divert management's attention from other matters or could otherwise have a
material adverse effect on our business, operating results and financial
condition, regardless of the outcome of the litigation.
WE DEPEND ON KEY COMPONENTS AND KEY SUPPLIERS TO MANUFACTURE OUR PRODUCTS.
We currently depend on a single supplier for various components we use to
manufacture our products due to their unique component designs and quality and
performance requirements. If single-sourced components were to become
unavailable on terms satisfactory to us, we would be required to purchase
comparable components from other sources. If for any reason we could not obtain
comparable replacement components from other sources in a timely manner, our
business, operating results and financial condition could be materially
adversely affected. In addition, many of our suppliers need our orders for
components to be placed far in advance. If we were unable to obtain sufficient
quantities of components used in the manufacture of our time or frequency
products, the resulting delays or reductions in product shipments could
materially adversely affect our business, results of operations and financial
condition. Due to rapid changes in semiconductor and other technology, on
occasion one or more of the electronic components used in our products have
become unavailable, resulting in unanticipated redesign and related delays in
shipments. We cannot assure you that we will not experience similar delays in
the future, the occurrence of which could materially adversely affect our
business, financial condition and results of operations.
9
<PAGE> 12
OUR BUSINESS COULD BE AFFECTED AS A RESULT OF GOVERNMENT REGULATIONS.
Wireless transmissions and emissions, and certain equipment used in
connection therewith, are regulated in the United States and internationally.
The enactment by federal, state, local or foreign governments of new laws or
regulations or a change in the interpretation of existing regulations could
adversely affect the market for our products. We cannot assure you that the
current trend toward deregulation and other regulatory developments favorable to
the promotion of new and expanded wireless and wireline services will continue
or that other future regulatory changes will have a positive impact on us. The
increasing demand for wireless communications has pressured regulatory bodies
worldwide to adopt new standards for such products, generally following
extensive investigation and deliberation over competing technologies. The delays
inherent in such governmental approval processes have in the past caused, and
may in the future cause, the cancellation, postponement or rescheduling of the
installation of communications systems by our customers. These delays could have
a material adverse effect on our business arising from results of operations and
financial condition.
WE FACE VARIOUS RISKS ARISING FROM OUR BUSINESS WITH THE U.S. GOVERNMENT.
Our business with the U.S. government, both directly and indirectly
through other government contractors, accounted for approximately 12%, 13% and
15% of net sales for 1998, 1997 and 1996, respectively. Our business with the
U.S. government is subject to various risks, including unpredictable reductions
in funds available for our projects and contract termination at the convenience
of the government. A significant portion of our government business is also
subject to reduction or termination due to government policy changes, such as
reductions in military defense spending.
WE HAVE IMPLEMENTED CERTAIN ANTI-TAKEOVER PROVISIONS.
Provisions of our certificate of incorporation and bylaws, as well as
provisions of Delaware law, could make it more difficult for a third party to
acquire us, even if doing so would be beneficial to our stockholders.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed a registration statement on Form S-3 with the SEC with
respect to the common stock offered hereby. This prospectus, which constitutes a
part of the registration statement, does not contain all of the information set
forth in the registration statement or the exhibits and schedules which are part
of the registration statement. You may read and copy any document we file at the
SEC's public reference rooms in Washington D.C. We refer you to the registration
statement and the exhibits and schedules thereto for further information with
respect to us and our common stock. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room. Our SEC filings are also
available to the public from the SEC's website at http://www.sec.gov.
We are subject to the information and periodic reporting requirements of
the Securities Exchange Act and, in accordance therewith, will continue to file
periodic reports, proxy statements and other information with the SEC. Such
periodic reports, proxy statements and other information will be available for
inspection and copying at the SEC's public reference rooms and the SEC's website
referred to above.
10
<PAGE> 13
The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose important information to you by
referring to those documents. We incorporate by reference the documents listed
below and any additional documents filed by us with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this offering of
securities is terminated. The information we incorporate by reference is part of
this prospectus, and any later information we file with the SEC will
automatically update and supercede this information.
The documents we incorporate by reference are:
1. our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as amended;
2. our Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999;
3. our Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1999;
4. our Current Report on Form 8-K, dated July 29, 1999;
5. our Amendment to Current Report of Form 8-K, filed on
October 12, 1999;
6. the description of our capital stock contained in our
Registration Statement on Form 8-A; and
7. all other reports filed by us pursuant to Section 13(a) or
15(d) of the SEC Exchange Act since December 31, 1998.
You may request a copy of these filings, at no cost, by writing or
calling us at Datum Inc., 9975 Toledo Way, Irvine, California 92618-1819,
telephone number (949)598-7500, Attention: David A. Young.
You should rely only on the information contained in this prospectus or
any supplement and in the documents incorporated by reference above. We have not
authorized anyone else to provide you with different information. You should not
assume that the information in this prospectus or any supplement or in the
documents incorporated by reference is accurate on any date other than the date
on the front of those documents.
ISSUANCE OF COMMON STOCK TO SELLING STOCKHOLDERS
On July 29, 1999, we entered into an Agreement and Plan of Merger
agreement with Datum Acquisition Sub., Inc., a Massachusetts corporation and our
wholly-owned subsidiary, Digital Delivery, Inc., a Massachusetts corporation,
and certain of Digital Delivery's stockholders. In the merger, we acquired 100%
of the outstanding common stock of Digital Delivery from the former Digital
Delivery stockholders in return for cash and 214,277 shares of our common stock.
In addition to the initial 214,277 shares issued to the former Digital Delivery
stockholders, pursuant to the merger agreement we will issue additional shares
of our common stock to each of the former Digital Delivery stockholders on each
of March 31, 2001 and March 31, 2002, in amounts based upon the performance of
our E-Business Solutions Division, which is organized around our Digital
Delivery subsidiary
11
<PAGE> 14
acquired in the merger. We are unable to estimate at this time how many
additional shares we will be obligated to so issue.
USE OF PROCEEDS
The proceeds from the sale of each selling stockholder's common stock
will belong to the selling stockholder. We will not receive any proceeds from
such sales.
12
<PAGE> 15
SELLING STOCKHOLDERS
Pursuant to the merger agreement, we agreed to file a registration
statement with the SEC to register the shares of our common stock we issued to
the former Digital Delivery stockholders for resale by them, and to keep the
registration statement effective until at least March 31, 2003. The registration
statement of which this prospectus is a part was filed with the SEC pursuant to
the merger agreement. The following table sets forth: (1) the name of each of
the former Digital Delivery stockholders who hold shares of our common stock
acquired in the merger; (2) the number of shares of our common stock owned by
each such former Digital Delivery stockholder prior to this offering, and (3)
the number of shares, and (if one percent or more) the percentage of the total
of the outstanding shares, of our common stock to be owned by each such former
Digital Delivery stockholder after this offering.
<TABLE>
<CAPTION>
Percentage
Common of Common
Common Stock Stock Owned Stock
Being Offered Upon Owned Upon
Common Stock Owned Pursuant to Completion Completion
Prior to the this of this of this
Name Offering(1) Prospectus(2) Offering(3) Offering(3)
- ------------------------------ --------------------- --------------- ------------- ------------
<S> <C> <C> <C> <C>
Timothy Bowe 15,055 15,055 0 *
Christopher Bowe 587 587 0 *
Colman W. O'Connor 734 734 0 *
Gill Fishman 34,859 34,859 0 *
James Gould 2,010 2,010 0 *
T. Mark Hastings (4) 89,377 89,377 0 1.53%
L. Robert Johnson 991 991 0 *
Hari Khalsa 4,039 4,039 0 *
Stuart Levey 1,079 1,079 0 *
Ronald Margolis 1,005 1,005 0 *
Andy Miller 1,101 1,101 0 *
Steven Morlock 14,688 14,688 0 *
George Plourde 146 146 0 *
Ronald J. Rubbico 15,863 15,863 0 *
Richard Scimone 183 183 0 *
Ronald J. Subler 24,088 24,088 0 *
Vannevar Management, Inc. 2,525 2,525 0 *
Gerald Willett, Jr. 5,140 5,140 0 *
James A. Wilson 73 73 0 *
Jack Wool 734 734 0 *
------- ------- --- ----
TOTAL 214,277 214,277 0 3.68%
</TABLE>
* less than 1%
(1) The number of shares of common stock owned prior to this offering includes
those shares of common stock initially issued to the selling stockholders
in the merger on July 29, 1999, plus any shares of our common stock known
by us to already be held beneficially by the selling stockholder.
(2) For each of the selling stockholders, the number of shares of common stock
being offered under this prospectus represents the number of shares of our
common stock initially issued in the merger on July 29, 1999. Pursuant to
the merger agreement, we are obligated to issue to the selling stockholders
additional
13
<PAGE> 16
shares of our common stock in amounts based on the future performance of
our E-Business Solutions Division. The amount of such shares, or a
meaningful estimate thereof, is indeterminable at this time.
(3) Assuming all shares offered hereby are sold, the number of shares of our
common stock which each selling stockholder will own upon completion of
this offering is equal to the number of shares of our common stock owned by
such selling stockholder and not acquired in the merger or subsequently
acquired pursuant to the E-Business Solutions Division performance criteria
set forth in the merger agreement.
(4) Upon consummation of the merger, Mr. Hastings became our employee.
PLAN OF DISTRIBUTION
The shares of our common stock offered pursuant to this prospectus may
be offered and sold from time to time by the selling stockholders listed in the
preceding section, or their donees, transferees, pledgees or other successors in
interest that receive such shares as a gift or other non-sale related transfer.
These selling stockholders will act independently of us in making decisions with
respect to the timing, manner and size of each sale. All or a portion of the
common stock offered by this prospectus may be offered for sale from time to
time on the Nasdaq National Market or on one or more exchanges, or otherwise at
prices and terms than obtainable, or in negotiated transactions. The
distribution of these securities may be effected in one or more transactions
that may take place on the over-the-counter market, including, among others,
ordinary brokerage transactions, privately negotiated transactions or through
sales to one or more dealers for resale of such securities as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees or commissions may be paid by the selling
stockholders.
We will not receive any part of the proceeds from the sale of
common stock. The selling stockholders and intermediaries through whom such
securities are sold may be deemed "underwriters" within the meaning of the
Securities Act, in which event commissions received by such intermediary may be
deemed to be underwriting commissions under the Securities Act. We will pay all
expenses of the registration of securities covered by this prospectus. The
selling stockholders will pay any applicable underwriters' commissions and
expenses, brokerage fees or transfer taxes.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
on by Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport
Beach, California.
EXPERTS
The consolidated financial statements incorporated in this Registration
Statement by reference to the Annual Report on Form 10-K for the year ended
December 31, 1998 and the financial statements of Digital Delivery, Inc.
incorporated in this Registration Statement by reference to the Current Report
on Form 8-K/A filed on October 12, 1999, have been so incorporated in reliance
on the reports of PricewaterhouseCoopers LLP, independent accountants, given on
the authority of said firm as experts in auditing and accounting.
14
<PAGE> 17
YOU MAY RELY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY REFERENCE INTO
THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS
WITH DIFFERENT OR ADDITIONAL INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO
SELL, NOR IS IT SEEKING AN OFFER TO BUY, THE SECURITIES DISCUSSED IN THIS
PROSPECTUS IN ANY JURISDICTION WHERE THEIR OFFER OR SALE IS NOT PERMITTED. THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS
PROSPECTUS, REGARDLESS OF WHEN THIS PROSPECTUS IS DELIVERED OR WHEN THE
SECURITIES DISCUSSED IN THIS PROSPECTUS ARE SOLD.
235,705 SHARES
DATUM INC.
COMMON STOCK
----------------
PROSPECTUS
----------------
OCTOBER __, 1999
<PAGE> 18
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the costs and expenses, all of which shall be
borne by the Registrant, in connection with the offering of the shares of Common
Stock pursuant to this Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee............ $ 445
Accounting Fees and Expenses*..................... $2,000
Legal Fees and Expenses*.......................... $3,500
Miscellaneous Expenses*........................... $3,000
------
Total...................................... $8,945
======
</TABLE>
* Estimated
Item 15. Indemnification of Directors and Officers.
(a) As permitted by the Delaware law, the Registrant's restated
certificate of incorporation, as amended, eliminates the liability of directors
to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, except to the extent otherwise required by
Delaware law. The Registrant also carries directors and officers liability
insurance.
(b) The Registrant's restated certificate of incorporation, as amended,
provides that the Registrant will indemnify each person who was or is made a
party to any proceeding by reason of the fact that such person is or was its
director or officer against all expense, liability and loss reasonably incurred
or suffered by such person in connection therewith to the fullest extent
authorized by Delaware law. The Registrant's bylaws provide for a similar
indemnity to its directors and officers to the fullest extent authorized by
Delaware law.
(c) The Registrant's restated certificate of incorporation, as amended,
also gives the Registrant the ability to enter into indemnification agreements
with each of its officers and directors, and the Registrant has entered into
indemnification agreements with each of its directors and officers which provide
for the indemnification of its directors and officers against any and all
expenses, judgments, fines, penalties and amounts paid in settlement, to the
fullest extent permitted by law.
Item 16. Exhibits.
2 Agreement and Plan of Merger, dated as of July 29, 1999, by and
among the Registrant, Datum Acquisition Sub, Inc., a
Massachusetts corporation and a wholly-owned subsidiary of the
Registrant, Digital Delivery, Inc., a Massachusetts corporation,
and certain stockholders of Digital Delivery, Inc (incorporated
herein by reference from our Current Report on Form 8-K, dated
July 29, 1999).
5 Opinion of Stradling Yocca Carlson & Rauth, a Professional
Corporation.
23.1 Consent of PricewaterhouseCoopers LLP.
II-1
<PAGE> 19
23.2 Consent of Stradling Yocca Carlson & Rauth, a Professional
Corporation (included in Exhibit 5.1).
24 Power of Attorney (included on the signature page to the
Registration Statement - see page II-4.)
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under
the Securities Act, 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) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may 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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by 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
counsel the mater 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 Act and will be governed by the final
adjudication of such issue.
(d) (1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
II-2
<PAGE> 20
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it has met
all of the requirements for filing on Form S-3 and has caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irvine, State of California, on the 26th day of
October, 1999.
DATUM INC.
By: /s/ DAVID A. YOUNG
------------------------------------------
David A. Young,
Vice President and Chief Financial Officer
II-3
<PAGE> 21
POWER OF ATTORNEY
We, the undersigned officers and directors of Datum Inc., do hereby
constitute and appoint David A. Young, our true and lawful attorney-in-fact and
agent with full power of substitution and re-substitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, or any
related registration statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
SEC, granting unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute, 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 in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ LOUIS B. HORWITZ
- ------------------------------- Chairman of the Board and October 20, 1999
Louis B. Horwitz Director
/s/ ERIK H. VAN DER KAAY
- ------------------------------- Director, President and Chief October 20, 1999
Erik H. van der Kaay Executive Officer
(Principal Executive Officer)
/s/ DAVID A. YOUNG
- ------------------------------ Vice President and October 20, 1999
David A. Young Chief Financial Officer
(Principal Financial Officer)
/s/ G. TILTON GARDNER
- ------------------------------- Director October 20, 1999
G. Tilton Gardner
/s/ DAN L. MCGURK
- ------------------------------- Director October 20, 1999
Dan L. McGurk
/s/ EDWARD A. MONEY
- ------------------------------- Director October 20, 1999
Edward A. Money
</TABLE>
II-4
<PAGE> 22
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ MiCHAEL M. MANN
- ------------------------------- Director October 20, 1999
Michael M. Mann
/s/ R. DAVID HOOVER
- ------------------------------- Director October 20, 1999
R. David Hoover
</TABLE>
II-5
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
- ------- ----------- -----------
<S> <C> <C>
2 Agreement and Plan of Merger, dated as of July 29, 1999, by and
among the Registrant, Datum Acquisition Sub, Inc., a Massachusetts
corporation and a wholly-owned subsidiary of the registrant,
Digital Delivery, Inc., a Massachusetts corporation, and certain
stockholders of Digital Delivery, Inc (incorporated herein by
reference from our Current Report on Form 8-K, dated July 29,
1999).
5 Opinion of Stradling Yocca Carlson & Rauth, a Professional --
Corporation.
23.1 Consent of PricewaterhouseCoopers LLP. --
23.2 Consent of Stradling Yocca Carlson & Rauth, a Professional --
Corporation (included in the Opinion filed as Exhibit 5.1).
24 Power of Attorney (included on signature page to the --
registration statement at page II-4).
</TABLE>
II-6
<PAGE> 1
EXHIBIT 5
[STRADLING YOCCA CARLSON & RAUTH LETTERHEAD]
October 26, 1999
Datum Inc.
9975 Toledo Way
Irvine, California 92618
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-3 (the "Registration Statement") being filed by Datum Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 235,705 shares of the Company's common stock, $0.25 par value
(the "Common Stock") which were issued, or may be issued, to the stockholders
(the "Selling Stockholders") of Digital Delivery, Inc., a Massachusetts
corporation ("Digital Delivery") in connection with the acquisition by merger of
Digital Delivery pursuant to that certain Agreement and Plan of Merger, dated as
of July 29, 1999 (the "Merger Agreement"), by and among the Company, Digital
Delivery, Datum Acquisition Sub, Inc., a Massachusetts corporation and a
wholly-owned subsidiary of the Company, and certain stockholders of Digital
Delivery. The shares of Common Stock may be offered for resale from time to time
by and for the account of the Selling Stockholders named in the Registration
Statement.
We have reviewed the corporate action of the Company in connection with
this matter and have examined such documents, corporate records and other
instruments as we have deemed necessary for the purposes of this opinion.
Based on the foregoing, it is our opinion that the 235,705 shares of
Common Stock covered by the Registration Statement have been duly authorized,
that the 214,277 shares of the Common Stock already distributed to the Selling
Stockholders pursuant to the Merger Agreement were validly issued and are fully
paid and nonassessable, and that the 21,428 shares of Common Stock to be
distributed to the Selling Stockholders, when issued in accordance with the
Merger Agreement and in the manner described in the Registration Statement, will
be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
Stradling Yocca Carlson & Rauth
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 25, 1999 relating to the
consolidated financial statements, which appears in Datum Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1998, and of our report dated
September 9, 1999 relating to the financial statements of Digital Delivery,
Inc., which appears in Datum Inc.'s Current Report on Form 8-K/A filed on
October 12, 1999. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
- --------------------------------------
PricewaterhouseCoopers LLP
Costa Mesa, California
October 21, 1999
