SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No.1)
NET LNNX, INC.
(Name of Issuer)
Common Stock, No Par Value
(Title of Class of Securities)
64107P 10 2
(CUSIP Number)
Ronald W. Hayes, Jr.
1090 Powell Drive
Singer Island, FL 33404
(561) 844-6480
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Reporting Person)
March 10, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d.1(b)(3) or (4), check the following
box [ ] .
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The reminder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes.)
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CUSIP No. 64107P 10 2
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons:
R H Financial Services, Inc.
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) WC
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization Florida
Number of (7) Sole Voting Power 314,000
Shares Bene-
_______________________________________________________________
ficially (8) Shared Voting Power -0-
Owned by
_______________________________________________________________
Each Report- (9) Sole Dispositive Power -0-
ing Person
_______________________________________________________________
With (10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
314,000
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions) [ ]
(13) Percent of Class Represented by Amount in Row (11)
15.3%
(14) Type of Reporting Person (See Instructions) CO
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CUSIP No. 64107P 10 2
(1) Names of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons:
Ronald W. Hayes, Jr.
(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a)
(b)
(3) SEC Use Only
(4) Sources of Funds (See Instructions) OO
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e) [ ]
(6) Citizenship or Place of Organization U.S.
Number of (7) Sole Voting Power 410,421(1)(2)
Shares Bene-
_______________________________________________________________
ficially (8) Shared Voting Power -0-
Owned by
_______________________________________________________________
Each Report- (9) Sole Dispositive Power 410,421(2)
ing Person
_______________________________________________________________
With (10) Shared Dispositive Power -0-
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
410,421 (1)(2)
(12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions) [X ]
(13) Percent of Class Represented by Amount in Row (11) 19.9%
(14) Type of Reporting Person (See Instructions) IN
(1) Does not include 314,000 shares of common stock which R H Financial
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Services, Inc. has the right to vote pursuant to a voting trust agreement that
is disclosed herein. These 314,000 shares are attributed to Mr. Hayes by
virtue of his position as an officer, director and controlling shareholder of
R H Financial Services, Inc. Mr. Hayes disclaims beneficial ownership of
these 314,000 shares. See Items 2 and 3 herein for additional information with
respect to this.
(2) Includes an option to purchase 100,000 shares of Common Stock at $.875 per
share, granted to Mr. Hayes on January 31, 1997 which expires on January 31,
1999.
<PAGE>
This Amendment No. 1 hereby amends and supplements the Schedule 13D
(the "Schedule 13D"), filed January 8, 1997 with the Securities and Exchange
Commission (the "SEC") with respect to the common stock, no par value per
share ("Common Stock"), of Net Lnnx, Inc. (the "Issuer").
Item 1. Security and Issuer
This Amendment No. 1 relates to the Common Stock of the Issuer. The Issuer's
principal executive offices are presently located at 324 Datura Street, Suite
303, West Palm Beach, Florida 33401.
Item 2. Identity and Background
This Amendment No. 1 to Schedule 13D, is jointly filed pursuant to Rule
13d-1(f) by Ronald W. Hayes, Jr., an individual, and R H Financial Services,
Inc. ("RHF"), a Florida corporation.
Mr. Hayes is a director and president of the Issuer. Mr. Hayes is also a
director, the president and a controlling shareholder of RHF. RHF is a
privately held holding corporation.
Mr. Hayes' residence address is 1090 Powell Drive, Singer Island, Florida
33404. This address is also the business address of RHF.
Neither Ronald W. Hayes, Jr., nor RHF, during the last five (5) years, has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors).
Neither Ronald W. Hayes, Jr., nor RHF, during the last five (5) years, has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgement, decree or final order enjoining final violations of, or prohibiting
or mandating activities subject to federal or state securities laws or finding
any violation with resect to such laws.
Ronald W. Hayes, Jr. is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration
On December 31, 1996 (the "December 31, 1996 Transaction") R H
Financial Services, Inc. ("RHF") entered into a Stock Purchase Agreement
("Agreement") with Net Lnnx, Inc. ("the Issuer") to purchase 500,000 shares of
newly issued common stock of the Issuer, or approximately 25.6% of the then
issued and outstanding common stock of the Issuer. The source of the funds was
from RHF's equity capital.
The Agreement required RHF to pay consideration totalling $300,000, with
$25,000 payable at closing on December 31, 1996 (the "Closing Date"), $25,000
payable on January 14, 1997 with the remaining consideration to be paid
pursuant to a promissory note (the "Note") with $50,000 payable on January 31,
1997, and $50,000 payable on each of March 31, June 30, September 30 and
December 31, 1997. RHF made the initial payment of $25,000 due on the
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December 31, 1996 closing date and made no other payments pursuant to the
Agreement.
RHF also executed a voting trust agreement (the "Voting Trust Agreement")
with Robert C. Hackney, which provided RHF the right to vote an additional
314,000 shares of the Issuer's Common Stock for a period of two years. Any
dividends paid on the Common Stock are paid to the holder or holders of the
Voting Trust Certificate(s). As a result of the above, RHF controlled the
voting rights to approximately 41.7% of the then issued and outstanding
common stock of the Issuer. On January 4, 1997, Ronald W. Hayes, Jr.,
President of RHF, was appointed President of the Issuer.
On January 31, 1997, the Issuer's board of directors ("Board")
unanimously decided that the Agreement and the Note underlying the Agreement
ought to be reformed as a result of a number of unforeseen and unknown facts
and events discovered by RHF and the Issuer subsequent to the Closing Date.
On March 10, 1997, the Board unanimously adopted a plan submitted by Mr. Hayes
to restructure the Agreement and Note. The terms of restructure were as
follows: (a) In exchange for RHF returning 458,333 shares to the Issuer, the
Issuer, canceled the entire Note and reformed the Agreement to reflect a sale
of 41,667 shares of the Issuer's stock to RHF in exchange for the $25,000 RHF
paid on the Closing Date; and (b) no late payment penalties were charged by
the Issuer against RHF with respect to the $25,000 payable on January 14, 1997
and $50,000 payable on January 31, 1997, of which neither were paid.
RHF disposed of the 41,667 shares of the Issuer's common stock on April
9, 1997, pursuant to a gift transaction to a non-affiliate of the Issuer.
RHF claims no beneficial ownership of such shares. The Voting Trust Agreement
remains in full force and effect; therefore, RHF continues to control 314,000
shares of the Issuer's common stock.
On January 31, 1997, pursuant to a meeting of the Issuer's Board of
Directors, Mr. Hayes was granted 250,000 shares of the Issuer's Common Stock
and the Option to purchase 100,000 shares of Common Stock at $.875 per share
for a period of two years from the date therefrom. On May 19, 1997, the
Issuer's Board of Directors granted Mr. Hayes 100,000 shares of the Issuer's
Common Stock. These transactions were effected pursuant to the Issuer's 1996
Stock Plan as compensation for Mr. Hayes serving as a Director and President
of the Issuer, and for other valuable services to the Issuer.
Item 4. Purpose of Transaction
The purpose of the December 31, 1996 transaction was to provide operating
capital to the Issuer and to grant control of the Issuer to RHF. The purpose
of the January 31, 1997 and May 19, 1997 transactions was to provide Mr.
Hayes compensation for services to the Issuer as described in Item 4 above.
Mr. Hayes was appointed President of the Issuer on January 4, 1997. On behalf
of the Issuer, the Mr. Hayes is presently seeking candidates for merger with
or acquisition by the Issuer. Both Mr. Hayes and RHF reserve the right to
actively pursue various other proposals which could relate to or would result
in:
<PAGE>
a. An extraordinary corporate transaction, such as a merger, reorganization
or liquidation, involving the Issuer or any of its subsidiaries;
b. A sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
c. Any material change in the present capitalization or dividend policy of
the Issuer;
d. Changes in the Issuer's charter, by-laws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
e. Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
f. A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Act; or
g. Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Issuer
The aggregate number and percentage of class of securities identified
pursuant to Item 1 beneficially owned by each person named in Item 2 may be
found in rows 11 and 13 of the cover page.
The powers of the Reporting person identified in the preceding paragraph
has relative to the shares discussed herein may be found in rows 7 through 10
of the cover page.
On July 9, 1997, Mr. Hayes sold 8,248 shares of Issuer Common Stock
pursuant to a Post Effective Amendment to the Issuer's Registration Statement
on Form S-8. The shares were sold at the price of $0.8125 per share. No other
transactions in the class of securities reported on were effected by any of
the persons named in Item 5(a) during the past 60 days.
The Voting Trust Agreement described in Item 3 between RHF and Robert C.
Hackney, provides RHF the right to vote 314,000 shares of the Issuer's Common
Stock owned by Mr. Hackney for a period of two years. Any dividends paid on
the Common Stock are paid to Mr. Hackney.
Item 6. Contracts, Arrangements, Understandings or Relationships with respect
to the Securities of the Issuer.
Except as set forth elsewhere in this Schedule 13D/A, there are no
contracts, arrangements or understandings among the Persons named in Item 2
and between such persons and any person with respect to any securities of the
Issuer, including the transfer of voting of any of the securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls, guarantees
of profits, division of profits or loss, or the giving or withholding of
proxies.
<PAGE>
Item 7. Material to be Filed as Exhibits
A. Joint Filing Agreement between R H Financial Services, Inc. and Ronald
W. Hayes, Jr.
B. Voting Trust Agreement Between R H Financial Services, Inc. and Robert
C. Hackney.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
Dated: July 28, 1997
R H FINANCIAL SERVICES, INC.
/s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr., President
Ronald W. Hayes, Jr.
/s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr.
<PAGE>
[EXHIBIT A]
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into by and between Ronald W.
Hayes, Jr., an individual ("Hayes"); and R H Financial Services, Inc., a
Florida corporation ("RHF"), on July 28, 1997.
PREMISE
WHEREAS, Hayes and RHF are required to file Schedule 13D, and amendments
thereto, as promulgated under the Securities Exchange Act of 1934, as amended
("Exchange Act"), due to their beneficial ownership of Net Lnnx, Inc., a
Pennsylvania corporation ("Net Lnnx"), in excess of 5% of the outstanding
shares of Net Lnnx.
NOW THEREFORE, based on the foregoing premise, which is incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the sufficiency of which is hereby expressly
acknowledged, the parties hereto agree as follows:
1. Hayes and RHF acknowledge that each are required to file Schedule 13D,
and amendments thereto, as promulgated under the Exchange Act, due to their
beneficial ownership in excess of 5% of the outstanding shares of Net Lnnx
and, in the interest of consolidation and efficiency, desire to file a single
statement pursuant to Rule 13d-1(f) of the Exchange Act.
2. Hayes and RHF hereby consent to have a single Schedule 13D/A filed in a
joint manner pursuant to Rule 13d-1(f) of the Exchange Act in fulfillment of
the individual obligation of Hayes and the individual obligation of RHF to
file Schedule 13D, and amendments thereto.
IN WITNESS WHEREOF, the signatures of the parties hereto evidence their
mutual assent and acceptance of the Agreement as of the date first set forth
above.
R H FINANCIAL SERVICES, INC.
/s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr., President
Ronald W. Hayes, Jr.
/s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr.
<PAGE>
VOTING TRUST AGREEMENT
This Voting Trust Agreement, made this 31st day of December, 1996,
between Robert C. Hackney, hereinafter called the "Stockholder", and R H
Financial Services, Inc., hereinafter called the "Trustee".
RECITALS
A. The Stockholder represents that he is the owner of 314,000 shares of
capital stock of Net Lnnx, Inc., a Pennsylvania corporation, hereinafter
called the "Corporation".
B. In order to provide for the smooth and efficient operation of the
Corporation, to prevent conflicts, and to avoid deadlocks, the Stockholder
deems it to be in the best interests of the Corporation and all of the
Stockholders thereof that this Agreement be executed.
NOW, THEREFORE, in consideration of the foregoing recitals, the
Stockholder, in consideration of the mutual promises contained herein, hereby
agree with the Trustee, and the Trustee hereby agree with the Stockholder, as
follows:
Section One. Transfer of Stock to Trustee
The Stockholder shall deposit the number of shares of capital stock
referred to above and the certificates therefor, together with sufficient
instruments duly executed for the transfer thereof to the Trustee, and shall
receive in exchange therefor certificates hereinafter provided for. Upon the
making of such deposit, all shares represented by the stock certificates so
deposited shall be transferred on the books of the Corporation to the name of
the Trustee, who is hereby authorized and empowered to cause such transfers to
be made, and also to cause any further transfers to be made that may become
necessary, due to a change in the identity of any Trustee, as hereinafter
provided.
Section Two. Trustee's Control Over Stock
During the period this Agreement remains in force, the Trustee shall
possess legal title to the shares deposited, and shall be entitled to exercise
all rights whatsoever, including the right to vote in person or by proxy, in
respect of any and all deposited shares. However, the holder of a Trust
Certificate issued by the Trustee shall be entitled to receive payments equal
to any and all dividends collected by the Trustee with respect to shares of
stock deposited by him.
Section Three. Voting Trust Certificate
On deposit by the Stockholder of a certificate or certificates of shares
of stock hereunder, accompanied by instruments of transfer, the Trustee shall
deliver to such Stockholder a Voting Trust Certificate for the same number of
shares of stock as that represented by the certificate or certificates
deposited. Such Voting Trust Certificates shall be in substantially the
following form:
<PAGE>
VOTING TRUST CERTIFICATE
NO. 001 314,000 Shares
This certificates that Robert C. Hackney has deposited Three Hundred Fourteen
Thousand (314,000) shares of the capital stock of Net Lnnx, Inc. with the
undersigned as Trustee under a Voting Trust Agreement dated December 31, 1996,
between the holders of capital stock of Net Lnnx, Inc. and their heirs,
assigns and successors, and the undersigned, as Trustee. This certificate and
the interest represented hereby is transferable only on the books of the
Trustee upon presentation and surrender hereof. The holder of this
certificate takes it subject to all the terms and conditions of the aforesaid
Voting Trust Agreement and becomes a party to such Agreement and is entitled
to the benefits thereof.
Executed by the undersigned Trustee on the _______ day of ________________,
1996.
R H Financial Services, Inc., Trustee
BY: Ronald W. Hayes, Jr., President
Section Four. Additional Stock
After this Agreement has taken effect, the Trustee may from time to time
receive any additional fully paid shares of the capital stock of the
Corporation on the same terms and conditions as are set forth in this
Agreement and in respect to such shares so received the Trustee shall issue
and deliver certificates substantially in the form set forth above, entitling
the holder to all the rights above specified.
Section Five. Dividends
All dividends that may accrue on the stock deposited hereunder shall be
distributed pro rata among the holders of the Voting Trust Certificates, in
the proportion they are entitled thereto.
Section Six.Rights of Trustee
During the period this Agreement remains in effect, the Trustee shall
possess and shall be entitled to exercise, in person or by proxy, all rights
and powers of absolute owners in respect to all the stock of the Corporation
deposited with him, including the right to vote on, to take part in, and
consent to, any corporate or stockholders' actions of any kind whatsoever, and
to receive dividends and distributions on the stock. The Trustee's right to
vote shall include the right to vote for the election of directors and in
favor of or in opposition to any resolution or proposed action of any
character whatsoever that may require the consent of Stockholders.
Section Seven. Election of Directors
For so long as this Agreement may remain in effect, the Trustee hereunder
shall vote the stock deposited hereunder to effect the election of and to
<PAGE>
continue in office a Board of Directors consisting of Ronald W. Hayes, Jr.,
Robert C. Hackney and any such additional persons as the Trustee shall
designate.
Section Eight. Termination of Voting Trust
On December 31, 1998, unless the Trustee exercises their right, which is
hereby expressly granted to him, to terminate this Agreement at any time prior
to that date, the Trustee shall distribute the stock of the Corporation held
by him to the holders of the Voting Trust Certificates in proportion to their
respective holdings on surrender of their certificates to the Trustee, and
this Agreement shall thereupon terminate.
Section Nine. Sale or Purchase of Stock or Certificate by Trustee
Nothing contained herein shall deprive Trustee of the privilege to be
enjoyed by other depositors of selling or otherwise disposing of Voting Trust
Certificates as they see fit or of purchasing additional certificates or of
purchasing additional stock and selling it.
Section Ten. Compensation of Trustee
The Trustee shall not be entitled to any compensation.
Section Eleven. Resignation of Trustee
If the Trustee shall resign, be dissolved or liquidated, or otherwise
cannot act, this Trust shall terminate.
Section Twelve. Voting by Trustee
The Trustee shall have full power to vote for the election of Directors
of the Corporation, on all matters that may require the vote of the
Stockholders.
If any question arises on which the Trustee desires the opinion of the
Voting Trust Certificate Holders, a meeting may be called by the Trustee. At
such meeting, the owners of majority in interest of the Voting Trust
Certificates may indicate their preference to the Trustee.
Section Thirteen. Trustees' Liability for Negligence
The Trustee shall not be liable for acts or missions in acting on any
paper, document or signature believed by them to be genuine and to have been
signed by the proper party. They shall not be liable for any error of
judgment nor for any mistake of fact or law, nor for anything which they may
do or refrain from doing in good faith, except, however, that the Trustee
shall be liable for his own willful neglect or malfeasance. The Trustee may
consult with legal counsel and any action under this Agreement taken or
suffered in good faith by them in accordance with the opinion of counsel shall
be conclusive on the parties to this Agreement. The Trustee shall at all
times be fully protected and be subject to no liability in respect thereto.
<PAGE>
Section Twenty-One. Records
The counterpart of the Voting Trust Agreement and the copy of such record
so deposited with the Corporation shall be subject to the same right of
examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such
counterpart and such copy of such records shall be subject to examination by
any holder of record of Voting Trust Certificates either in person or by agent
or attorney, at any reasonable time for any proper purpose.
Section Twenty-Two. Construction
This Agreement is intended by the parties to be governed and construed in
accordance with the laws of the State of Florida.
Section Twenty-Three. Benefit
This Agreement shall be binding on and inure to the benefit of the heirs,
executors, administrators and assigns of the parties thereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the
day and year first above written. Signed in the Presence of:
WITNESS: TRUSTEE:
R H Financial Services, Inc.
By:/s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr.,
President
WITNESS: STOCKHOLDER:
/s/Robert C. Hackney
Robert C. Hackney
<PAGE>
VOTING TRUST CERTIFICATE
NO. 011 314,000 Shares
This certificates that Robert C. Hackney has deposited Three Hundred Fourteen
Thousand (314,000) shares of the capital stock of Net Lnnx, Inc. with the
undersigned as Trustee under a Voting Trust Agreement dated December 31, 1996,
between the holders of capital stock of Net Lnnx, Inc. and their heirs,
assigns and successors, and the undersigned, as Trustee. This certificate and
the interest represented hereby is transferable only on the books of the
Trustee upon presentation and surrender hereof. The holder of this
certificate takes it subject to all the terms and conditions of the aforesaid Vo
ting Trust Agreement and becomes a party to such Agreement and is entitled to
the benefits thereof.
Executed by the undersigned Trustee on the 31st day of December, 1996.
/s/Ronald W. Hayes, Jr.
R H Financial Services, Inc., Trustee
BY: Ronald W. Hayes, Jr., President
