NET LNNX, INC.
324 Datura Street, Suite 200
West Palm Beach, Florida 33401
Commission File No.: 333-5862
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INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND RULE 14f-1 THEREUNDER
--------------------------
NO VOTE OR OTHER ACTION OF THE COMPANY'S STOCKHOLDERS IS
REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
NO PROXIES ARE BEING SOLICITED AND YOU ARE REQUESTED NOT TO
SENT THE COMPANY A PROXY.
This Information Statement (the "Information Statement") is
being mailed on or about February 26, 1999, to the holders of
record on January 31, 1999, of the shares of the common stock, no
par value (the "Common Stock") of Net Lnnx, Inc. (the "Company").
It is being furnished in connection with the election of certain
designees to the Board of Directors of the Company (the
"Designees").
The Company entered into an Agreement and Plan of Merger (the
"Agreement") on February 18, 1999, with Net Sub, Inc., its own
wholly owned subsidiary ("Net Sub"), and PrintOnTheNet.com
("POTN"). The Agreement provides for the Company to acquire (the
"Acquisition") all of the outstanding Common Stock of POTN in
exchange for (i) 16,500,000 shares of the Company's Common Stock
and (ii) 1,000,000 shares of the Company's Preferred Stock. The
Preferred Stock is convertible into an additional 7,207,000 shares
of Common Stock.
POTN was recently organized to provide a fully interactive
shopping site through which companies of all sizes will be able to
design and order their printed materials via the World Wide Web.
The Company and POTN have agreed to elect Benjamin and Samuel
Rogatinsky, the principal shareholders of POTN, and Paul Lambert,
a minority shareholder of POTN, to the Board of the Company when
the Acquisition closes, effective as of that date. At the same
time, all but one of the Company's existing directors have agreed
to resign. The closing (the "Closing") of the Acquisition is
expected to occur on March 10, 1999.
The Closing will result in a change of control. If the
Acquisition is not completed, there will not be a change in
control. See "Certain Relationships and Related Acquisitions" for
a more complete description of the terms of the Acquisition.
<PAGE>
No action is required by the shareholders of the Company to
conclude the Acquisition or in connection with the appointment of
Benjamin and Samuel Rogatinsky to the Board and the resignation of
all but one of the Company's exiting directors at the Closing.
However, Section 14(f) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), requires the Company to mail to the
Company's shareholders the information contained in this
Information Statement prior to a change in a majority of the
Company's directors. This is because the change in control is not
being done at a meeting of the Company's shareholders.
The principal executive office of the Company is currently
located at 324 Datura Street, Suite 200, West Palm Beach, Florida
33401. Upon completion of the Acquisition, the principal office of
the Company will be located at 7700 N.W. 37th Avenue, Miami, Florida
33147.
COMMON STOCK AND PREFERRED STOCK
The shares of Common Stock are the only class of voting
securities of the Company outstanding. They are each entitled to
one vote. The shares of Preferred Stock will be issued at the
Closing of the Acquisition. Each share Preferred Stock will be
entitled to one vote. As of January 31, 1999, there were 2,634,102
shares of Common Stock and no shares of Preferred Stock
outstanding. After the Acquisition, there will be 19,134,102
shares of Common Stock and 1,000,000 shares of Preferred Stock
outstanding.
RIGHT TO DESIGNATE DIRECTORS; THE DESIGNEES
The Board of Directors of the Company currently consists of 3
members. Each director holds office until his or her successor is
elected and qualified or until his or her death, resignation or
removal. When the Acquisition closes, all but one of the current
directors of the Company will resign and the remaining director
will elect Benjamin and Samuel Rogatinsky as well as Paul Lambert
to the Board. Benjamin and Samuel Rogatinsky and Paul Lambert have
agreed to act as directors.
<PAGE> 2
The Designees may take office at any time following the
Closing, but not less than ten (10) days after the Company files
this Information Statement with the Securities and Exchange
Commission and transmits it to holders of record of the Company's
Common Stock, who would be entitled to vote at a meeting for
election of directors, and that, upon assuming office, the
Designees will thereafter constitute a majority of the Board.
DESIGNEES
The following table sets forth the name, present principal
occupation or employment, year employment history and certain other
information concerning the Designees:
Benjamin Rogatinsky Age 31. Mr. Rogatinsky will serve as a
director of the Company. He is currently
Chairman and CEO of POTN and will hold
the same position at the Company after he
is elected to the board. He has served
as President of National Lithographers
and Publishers, Inc., a commercial
printing company, from 1996 to the
present and has also been employed as
President of PrintAmerica Management
Company, Inc. from 1997 to the present.
Benjamin Rogatinsky is the brother of
Samuel Rogatinsky, the designee director
described below.
Samuel Rogatinsky Age 29. Mr. Rogatinsky will serve as a
director of the Company. He is currently
President and COO of POTN and will hold
the same positions at the Company after
he is elected to the Board. From 1996 to
the present, he serves as Vice President
of National Lithographers and Publishers,
Inc., a commercial printing company.
From 1997 to the present, he has also
been employed as a Vice President of
PrintAmerica Management Company, Inc.
Samuel Rogatinsky is the brother of
Benjamin Rogatinsky, the designee
director described above.
Paul Lambert Age 31. Mr. Lambert will serve as a
director of the Company. He is currently
CFO of POTN and will hold the same
position at the Company after he is
elected to the Board. For the past five
years, Mr. Lambert also served in the
capacity of President of Lambert
Advisors, a management consulting
company.
CURRENT DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Pursuant to the provisions of the Company's Bylaws, the
Company's current directors and executive officers hold office
until his or her successor is elected or appointed and qualified,
or until his or her death, resignation or removal by the Board of
Directors. Certain information about the Company's current
directors and executive officers is set forth below.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Ronald W. Hayes, Jr. 32 Chairman of Board/President/
Director
William R. Colucci 60 Executive Vice President/Director
Thomas Pickard 61 Director
</TABLE>
<PAGE> 3
Ronald W. Hayes, Jr. has served as Chairman of the Board,
President and a Director of the Company since January 1997. He is
in charge of implementing the Company's acquisition strategy. Mr.
Hayes is also a Director of Harbor Town Holding Group I, Inc., a
publicly held corporation which reports to the Securities and
Exchange Commission. Mr. Hayes is also presently the President of
a privately held management firm known as Harbor Town Management
Group, Inc., a Florida corporation, which provides investment
banking and business consulting services. From 1994 to 1997, Mr.
Hayes served as President and Chairman of R.H. Financial Services,
Inc., an investment services company which provided investment
banking, brokerage and consulting services. Also, from 1994 to
1995, Mr. Hayes served as a Director of Action Products, Inc., a
publicly traded Nasdaq listed company. From 1991 to 1995, he was
employed as a stockbroker and office manager with Prudential
Securities and First Montauk Securities, Inc.
Mr. Colucci has served as the Executive Vice President and a
Director since September 1997. His duties include assisting the
Company in implementing its acquisition strategy. Mr. Colucci is
also a Director of Harbor Town Holding Group I, Inc., a publicly
held corporation which reports to the Securities and Exchange
Commission. Mr. Colucci is also presently a consultant with a
privately held management firm known as Harbor Town Management
Group, Inc., a Florida corporation, which provides investment
banking and business consulting services. From June 1996 to May
1997, Mr. Colucci served as Chief Operating Officer and SEC
Compliance officer for Physicians Laser Services, Inc., a publicly
traded Delaware corporation. From April 1991 to May 1996, Mr.
Colucci served as a senior partner of Decision Dynamics, Inc., a
private business and real estate consulting firm.
Mr. Pickard has served as a director since December 1998. His
duties include assisting the Company in implementing its
acquisition strategy. Mr. Pickard is also presently the marketing
director for Therapy Technologies, Inc. and has served in such
capacity since 1988.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company does not have standing audit, nominating or
compensation committees of the Board of Directors, or committees
performing similar functions. During the year ended December 31,
1998, the Board of Directors held no meetings and acted by written
consent 12 times. Each director participated in all of the actions
of the Board.
Directors who are full-time employees of the Company receive
no additional compensation for services as Directors. There are
currently no Directors who are full-time employees of the Company.
The Company has been advised that each of the Designees will be
full-time employees of the Company.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Other than as set forth below, no compensation has been paid
or accrued for the benefit of any executive officer or directors of
the Company during the fiscal year ended December 31, 1998.
<PAGE> 4
Neither Benjamin Rogatinsky, Samuel Rogatinsky or Paul
Lambert, the three Designees, have entered into employment
arrangements with the Company. The terms of their employment
agreements with the Company subsequent to the Closing have not yet
been determined.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h)
Other Securities All
Annual Restricted Underlying Other
Name & Compen- Stock Options/ LTIP Compen-
Position Year Salary ($) Bonus($) sation Award(s) SARs(#) Payouts sation
($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald W. Hayes, Jr. 1998 10,200(1) -0- -0- -0- -0- -0- 20,000(2)
Director,
Chairman of the
Board and
President
William R. Colucci 1998 33,391(3) -0- -0- -0- -0- -0- 5,000(4)
Director and
Executive Vice
President
</TABLE>
Notes to table:
(1) In July 1998, Ronald W. Hayes, Jr. was granted 30,000 shares
of common stock of the Company as compensation for serving as
the Company's chairman of the board of directors and
president. The per share closing market price of the
Company's common stock on July 14, 1998, the date of the
grant, was $.034.
(2) As part of his compensation for serving as a director of the
Company during 1997, Ronald W. Hayes, Jr. was awarded options
to purchase 100,000 shares of the Company's common stock at
a price of $0.875 per share exercisable, in whole or in part,
at any time on or before January 31, 1999. On January 1,
1998, in connection with the terms of a contemplated merger
which never occurred, the Company redeemed all such 100,000
options at a per option price of $0.20 or $20,000 in the
aggregate, and such options were canceled. The per share
closing market price of the Company's common stock on
December 31, 1997 was $0.25.
(3) In July 1998, William R. Colucci was granted 98,209 shares of
common stock of the Company (an aggregate value of $33,391)
as compensation for serving as a director and officer of the
Company. The per share closing market price of the Company's
common stock on July 14, 1998, the date of the grant, was
$0.34.
(4) As part of his compensation for serving as a director of the
Company during 1997, William R. Colucci was awarded options
to purchase 100,000 shares of the Company's common stock at
a price of $0.687 per share. On January 1, 1998, in
connection with the terms of a contemplated merger which
never occurred, the Company redeemed 25,000 options at a per
option price of $0.20 or $5,000 in the aggregate, and such
redeemed options were canceled. The per share closing market
price of the Company's common stock on December 31, 1997 was
$0.25.
The Company has no bonus or incentive plans in effect, nor
are there any understandings in place concerning additional
compensation to the Company's officers and directors.
Each person who serves as a director of the Company is
compensated up to $500 for travel expenses in the event a director
is traveling outside South Florida and is required to return to
South Florida to attend an emergency director's meeting.
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following tables set forth the number of shares, based on
information obtained from the persons named below, of (I) the
Common Stock of the Company beneficially owned as of January 31,
1999 by (i) owners of more than 5% of the Company's Common Stock
and, (ii) all officers and directors of the Company individually
and as a Group and (II) the Common Stock and the Preferred Stock
of the Company to be beneficially owned as of the date of the
Closing by (i) owners of more than 5% of the Company's Common
Stock and (ii) all officers and directors of the Company
individually and as a Group.
I.Prior to Closing of the Acquisition:
<TABLE>
<CAPTION>
Security Ownership of Certain Beneficial Owners and Management
Name and Address of Amount and Nature of Percent of Class(3)
Beneficial Owner(1) Beneficial Owner(2)
<S> <C> <C>
Robert & Cyndee Hackney, JTWROS 262,624 shares 9.97%
Ronald W. Hayes, Jr. 252,359 shares 9.58%
Louis E. Selman 250,000 shares 9.49%
JRKR Family Partners, Ltd. 250,000 shares 9.49%
Ronald P. Perella 200,000 shares 7.59%
William R. Colucci(4) 197,500 shares 7.49%
David M. Bovi 160,000 shares 6.07%
Thomas Pickard -0- shares 0%
All officers and directors as
group (3 persons)(4) 449,859 shares 17.01%
</TABLE>
(1) The address of each of the persons listed above is care of
the Company.
(2) Unless otherwise noted, the Company believes that all
persons named in the table have sole voting and investment
power with respect to all shares of stock beneficially
owned by them.
(3) Based upon 2,634,102 shares of Common Stock outstanding as
of January 31, 1999.
(4) Includes the right to purchase up to 75,000 shares of the
Company's common stock at any date prior to November 25,
1999.
<PAGE> 6
II. Subsequent to Closing of the Acquisition:
<TABLE>
<CAPTION>
Security Ownership of Certain Beneficial Owners and Management
Name and Address of Amount and Nature Percent of Amount and Percent of Class
Beneficial Owner(1) of Beneficial Class(3) Nature of Assuming Conversion
Owner(2) Beneficial of Preferred Stock into
Ownership Common Stock
Assuming
Conversion of
Preferred Stock
into Common
Stock(4)
<S> <C> <C> <C> <C>
Benjamin Rogatinsky 7,837,500 40.96% 11,260,825 42.75%
Samuel Rogatinsky 7,837,500 40.96% 11,260,825 42.75%
Paul Lambert 825,000 4.31% 1,185,350 4.50%
William R. Colucci(5) 197,500 1.20% 197,500 *%
All officers and directors
as a group (4 persons)(5) 16,697,500 87.27% 23,902,000 90.75%
</TABLE>
* Less than 1%
(1) The address of each of the persons listed above is care of
the Company.
(2) Unless otherwise noted, the Company believes that all persons
named in the table have sole voting and investment power with
respect to all shares of stock beneficially owned by them.
(3) Based upon 19,134,102 shares of Common Stock outstanding as
of the consummation of the Acquisition.
(4) The 1,000,000 shares of Preferred Stock to be issued in the
Acquisition are convertible into 7,207,000 Shares of Common
Stock. However, there are only 20,000,000 shares of the
Company's common stock currently authorized. Almost all have
been issued or will be issued in the Acquisition. There are
not enough shares of common stock authorized to allow all of
the preferred stock to be converted into common stock. After
the Acquisition, Benjamin and Samuel Rogatinsky, who will be
the majority shareholders of the Company, intend to cause the
number of shares of common stock the Company is authorized to
issue to be increased to cover the Preferred Stock's
conversion rights at a shareholder meeting called for that,
and possibly other, purposes.
(5) Includes the right to purchase up to 75,000 shares of the
Company's common stock at any date prior to November 25,
1999.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, officers and persons who own more than 10% of
the Common Stock of the Company ("Reporting Persons") to file
reports of ownership and changes in ownership with the Securities
and Exchange Commission. Reporting Persons are required by
Securities and Exchange Commission regulations to furnish the
Company with copies of all Section 16(a) reports they file.
<PAGE> 7
Ronald W. Hayes, Jr., an officer, director and beneficial owner
of more than 10% of the Company's common stock, failed to timely
file a required Form 4 for July 1998 with respect to one
transaction; and William R. Colucci, an officer and director,
failed to timely file a required Form 4 for July 1998 with respect
to one transaction. To the best knowledge of the Company, Robert
& Cyndee Hackney, JTWROS, beneficial owners of more than 10% of
the Company's common stock during 1998, were delinquent with their
Exchange Act Section 16(a) reporting requirements during the most
recent fiscal year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except for the issuance of the Company's shares of Common and
Preferred Stock in the Acquisition, since 1997, no director or
executive officer of the Company, any nominee to election as a
director, or any person known to the Company to own of record or
beneficially more than 5% of the Company's Common Stock or any
member of the immediate family of any of the foregoing persons
had, or will have, any direct or material interest in any
transaction or series of similar transactions to which the Company
or any of its subsidiaries, was or is to be a party, in which the
amount involved exceeds $60,000.
Pursuant to the provisions of the Agreement, Net Sub will be
merged with and into POTN, whereby it is contemplated that each
outstanding share of POTN Common Stock will be converted into
16,500 shares of the Company's Common Stock and 1,000 shares of
the Company's Preferred Stock, each one of which is convertible
into 7.207 shares of the Company's Common Stock, and each
outstanding share of Net Sub Common Stock will be converted into
1 shares of POTN Common Stock. Subsequent to Closing, POTN shall
survive the merger and become a subsidiary of the Company, and Net
Sub will "disappear" with and into POTN and no longer exist.
Dated: February 26, 1999.
NET LNNX, INC.
/s/ RONALD W. HAYES, JR.
Ronald W. Hayes, Jr.,
Chairman of the Board of Directors
