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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DATALINK.NET, INC.
(Formerly Named Datalink Systems Corporation)
---------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
NEVADA 36-3574355
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1735 Technology Drive, Suite 790, San Jose, California 95110
(408) 367-1700
--------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
Anthony N. LaPine, President
1735 Technology Drive, Suite 790, San Jose, California 95110
(408) 367-1700
--------------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Paula J. Peters, Esq.
Greenberg Glusker Fields Claman & Machtinger LLP
1900 Avenue of the Stars, Suite 2100
Los Angeles, California 90067
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable 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]
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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 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: [ ]
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 COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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DATALINK.NET, INC.
[LOGO]
1,346,154 SHARES OF COMMON STOCK
-----------------------------
This prospectus relates to the possible offer and sale from time to time of
up to 1,346,154 shares of common stock, par value $0.01 by the "selling
stockholders" identified in this prospectus. We will not receive any proceeds
from the sale of the shares of common stock offered by the selling stockholders.
We are registering the offer and sale of these shares pursuant to our
contractual obligations in order to provide the selling stockholders with free
tradable securities, but the registration of such shares does not necessarily
mean that all of the shares will be issued in satisfaction of the selling
stockholders' exchange rights or that any of the shares will be offered or sold
by the selling stockholders.
Our shares of common stock are traded on the American Stock Exchange under
the symbol "DLK". On March 7, 2000, the closing sale price of our common stock
was $35 15/16. As of March 7, 2000, the year high and low closing prices for our
common stock were $54 1/2 and $1 1/16, respectively.
This investment involves a high degree of risk. You should purchase shares
only if you can afford a complete loss. See "Risk Factors" beginning on page 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------------
THE DATE OF THIS PROSPECTUS IS MARCH 21, 2000
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TABLE OF CONTENTS
Page
----
COMPANY SUMMARY............................................................5
RISK FACTORS...............................................................6
USE OF PROCEEDS...........................................................10
SELLING STOCKHOLDERS......................................................10
PLAN OF DISTRIBUTION......................................................11
DESCRIPTION OF SECURITIES.................................................13
LEGAL MATTERS.............................................................14
EXPERTS...................................................................14
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.........................14
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COMPANY SUMMARY
Datalink.net, Inc. is an Internet company that recognizes the full market
potential of the emerging convergence between two rapidly evolving network
technologies: wireless data and the Internet. Datalink.net is uniquely
positioned to benefit from the pending explosive growth of this juncture by
possessing the technology that meets the immediate wireless needs of enterprises
and consumers while readily adaptable to next generation wireless services.
There are three primary market segments for wireless applications: the Business
Market, the Business User, and the Consumer. Because growth in one market
segment necessarily impacts the other, Datalink.net embraces the strategy of
addressing both the enterprise and the consumer needs through its two distinct
business models: the Business-to-Business (B2B) group and the
Business-to-Consumer (B2C) group. Simply put, the B2B group focuses on the
Internet web site owner and corporate enterprises as the customer, while the B2C
focuses on the wireless device owner as the customer. This dual strategy allows
Datalink.net to generate revenue from both ends of the web-to-wireless
marketplace.
Datalink.net is the only Internet-based company to apply its
Web-to-Wireless technology to meet both the wireless consumer's need for
individualized service as well as the competitive enterprise's need for
comprehensive and tailored wireless business solutions. On the
business-to-consumer (B2C) side of its operations, Datalink.net acts as a
content aggregator and enables consumer access to selective Internet data. The
XpressLink(TM)platform allows Datalink.net to construct and offer an array of
information products that address the needs of consumers and enterprises to
receive and distribute selective data, all according to customer preferences and
all delivered in real time. Datalink.net's products and services feature highly
user-specific selection criteria, allowing both business and consumers to
transmit and receive exactly the information they want, whenever they want. This
wireless technology not only increases individual mobility, it also expands the
reach of e-commerce and other Internet-based businesses.
As one of the industry's leading Wireless Application Service Providers,
Datalink.net has the unique ability to extend Internet franchises to the
wireless world by providing comprehensive Web-Centric solutions to enterprises.
Through the Company's patented core technology, the XpressLink(TM)application
server, Datalink.net constructs Web-to-Wireless solutions to meet the wireless
needs of the business-to-business (B2B) market. The Company's B2B strategy is
compelling due to the integration of standard graphical interface with wireless
data communications. The use of a familiar interface with which today's Internet
user is already comfortable will foster widespread adaptation of Datalink.net's
wireless solutions.
On the B2B side, in addressing the needs of Internet enterprises,
Datalink.net seeks to provide not only wireless solutions for
business-to-business transactions, but also to offer comprehensive solutions for
corporate wireless strategies. Datalink.net can develop customized vertical
applications to wirelessly enable business operations, such as sales force
automation, field service, and dispatching. Datalink.net also provides
horizontal applications to serve the need of mobile workers and other business
users whose effectiveness require wireless access to their e-mail, calendars,
and other corporate data. The B2B strategy takes into account all layers of the
enterprise's needs. In short, Datalink.net acts as the Wireless Application
Service provider and constructs the wireless infrastructure for Internet
enterprises.
Datalink.net is aggressively pursuing further developments of its B2B
strategies. Significant in this progress is the formation of a new business
unit, Net2Wireless.com, which will concentrate on providing B2B consulting
services and turnkey applications for wireless enablement of corporate Intranet,
Internet, and enterprise processing. These comprehensive business solutions
offerings are now being marketed to manufacturers of wireless devices, wireless
channels, financial institutions, web developers, and corporate businesses
requiring wireless initiatives.
Our corporate offices are located at 1735 Technology Drive, Suite 790, San
Jose California 95110. Our telephone number is (408) 367-1700 and our world wide
web site is www.datalink.net.
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RISK FACTORS
Investing in the shares is very risky. You should be able to bear a complete
loss of your investment. In deciding whether to purchase the shares, you should
carefully consider the following factors, among others, as well as information
contained in this prospectus, our most recent annual report on Form 10-KSB, and
the other documents incorporated by reference into this prospectus:
WE HAVE HISTORICALLY INCURRED LOSSES AND THESE LOSSES MAY INCREASE IN THE
FUTURE.
We have recorded a net loss for each year since our current business
started in 1996 through our fiscal year ended March 31, 1999. As of December 31,
1999, we had an accumulated deficit of $28,216,252. Additionally, we had a
reported loss of approximately $2,112,000 for the nine month period ended
December 31, 1999. Because we expect to continue to incur significant sales and
marketing, systems development and administrative expenses, we will need to
generate significant revenue to become profitable and sustain profitability on a
quarterly or annual basis. We may not achieve or sustain our revenue or profit
goals and our losses may continue or grow in the future. As a result, we may not
be able to increase revenue or achieve profitability on a quarterly or annual
basis.
THERE IS NO ESTABLISHED MARKET FOR WIRELESS DATA SERVICES AND WE MAY NOT BE ABLE
TO SELL ENOUGH OF OUR SERVICES TO BECOME PROFITABLE.
The markets for wireless data services are still emerging and continued
growth in demand for and acceptance of these services remains uncertain. Current
barriers to market acceptance of these services include cost, reliability,
functionality and ease of use. We cannot be certain that these barriers will be
overcome. Our competitors may develop alternative wireless data communications
systems that gain broader market acceptance than our systems. If the market for
our services does not grow or grows more slowly than we currently anticipate, we
may not be able to attract customers for our services and our revenues would be
adversely affected.
WE MAY NOT ACHIEVE PROFITABILITY IF WE ARE UNABLE TO MAINTAIN, IMPROVE AND
DEVELOP THE WIRELESS DATA SERVICES WE OFFER.
We believe that our future business prospects depend in part on our ability
to maintain and improve our current services and to develop new ones on a timely
basis. Our services will have to achieve market acceptance, maintain
technological competitiveness and meet an expanding range of customer
requirements. As a result of the complexities inherent in our service offerings,
major new wireless data services and service enhancements require long
development and testing periods. We may experience difficulties that could delay
or prevent the successful development, introduction or marketing of new services
and service enhancements. Additionally, our new services and service
enhancements may not achieve market acceptance. If we cannot effectively
maintain, improve and develop services we may not be able to recover our fixed
costs or otherwise become profitable.
IF WE DO NOT RESPOND EFFECTIVELY AND ON A TIMELY BASIS TO RAPID TECHNOLOGICAL
CHANGE, OUR SERVICES MAY BECOME OBSOLETE AND WE MAY LOSE SALES.
The wireless and data communications industries are characterized by
rapidly changing technologies, industry standards, customer needs and
competition, as well as by frequent new product and service introductions. Our
services are integrated with wireless handheld devices and the computer systems
of our customers. Our services must also be compatible with the data networks of
wireless carriers. We must respond to technological changes affecting both our
customers and suppliers. We may not be successful in developing and marketing,
on a timely and cost-effective basis, new services that respond to technological
changes, evolving industry standards or changing customer requirements. Our
ability to grow and achieve profitability will depend, in part, on our ability
to accomplish all of the following in a timely and cost-effective manner:
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- effectively use and integrate new wireless and data technologies;
- continue to develop our technical expertise;
- enhance our wireless data, engineering and system design services;
- develop applications for new wireless networks; and
- influence and respond to emerging industry standards and other
changes.
WE DEPEND UPON WIRELESS NETWORKS OWNED AND CONTROLLED BY OTHERS. IF WE DO NOT
HAVE CONTINUED ACCESS TO SUFFICIENT CAPACITY ON RELIABLE NETWORKS, WE MAY BE
UNABLE TO DELIVER SERVICES AND OUR SALES COULD DECREASE.
Our ability to grow and achieve profitability partly depends on our ability
to buy sufficient capacity on the networks of wireless carriers and on the
reliability and security of their systems. We depend on these companies to
provide uninterrupted and "bug free" service and would not be able to satisfy
our customers' needs if they failed to provide the required capacity or needed
level of service. In addition, our expenses would increase and our profitability
could be materially adversely affected if wireless carriers were to increase the
prices of their services.
WE MAY FAIL TO SUPPORT OUR ANTICIPATED GROWTH IN OPERATIONS WHICH COULD REDUCE
DEMAND FOR OUR SERVICES AND MATERIALLY ADVERSELY AFFECT OUR REVENUE.
Our business strategy is based on the assumption that the number of
subscribers to our services, the amount of information they want to receive and
the number of services we offer will all increase. We must continue to develop
and expand our systems and operations to accommodate this growth. The expansion
and adaptation of our customer service and network operations center requires
substantial financial, operational and management resources. We may be unable to
expand our operations for one or more of the following reasons:
- we may not be able to locate or hire at reasonable compensation rates
qualified engineers and other employees necessary to expand our
capacity;
- we may not be able to obtain the hardware necessary to expand our
capacity;
- we may not be able to expand our customer service, billing and other
related support systems; and - we may not be able to obtain sufficient
additional capacity from wireless carriers.
Due to the limited deployment of our services to date, the ability of our
systems and operations to connect and manage a substantially larger number of
customers while maintaining superior performance is unknown. Any failure on our
part to develop and maintain our wireless data services as we experience rapid
growth could significantly reduce demand for our services and materially
adversely affect our revenue.
WE DEPEND ON RECRUITING AND RETAINING KEY MANAGEMENT AND TECHNICAL PERSONNEL
WITH WIRELESS DATA AND SOFTWARE EXPERIENCE AND WE MAY NOT BE ABLE TO DEVELOP NEW
PRODUCTS OR SUPPORT EXISTING PRODUCTS IF WE CANNOT HIRE OR RETAIN QUALIFIED
EMPLOYEES.
Because of the technical nature of our products and the dynamic market in
which we compete, our performance depends on attracting and retaining key
employees. Competition for qualified personnel in the wireless data and software
industries is intense and finding qualified personnel with experience in both
industries is even more difficult. We believe there are only a limited number of
individuals with the requisite skills in the field of wireless data
communication, and it is becoming increasingly difficult to hire and retain
these persons. We have a written employment agreement and key-man life insurance
in the face amount of $3 million with Anthony N. LaPine, the Company's chairman,
CEO and president. We do not have employment agreements or key-man life
insurance with any other officer. The loss of Mr. LaPine or any other officer
may have an adverse effect on our business and prospects by depriving us of the
management services necessary to operate Datalink.net and achieve profitability.
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THERE IS NO ASSURANCE THAT WE WILL BE ABLE TO EFFECTIVELY COMPETE AGAINST
CURRENT AND FUTURE COMPETITORS. OUR MARKET IS VERY COMPETITIVE.
There are a number of competitors who are larger and have much greater
resources than we do. Our competitors have more experienced people and larger
facilities and budgets than we do. These competitors could use their resources
to conduct greater amounts of research and development and to offer services at
lower prices than we can. These factors may adversely affect our ability to
compete by decreasing the demand for our products and services.
WE MAY NEED TO RAISE ADDITIONAL FUNDS.
These funds may not be available to us. Alternatively, raising additional
funds may dilute your share ownership. We have met capital needs with private
sales of securities. However, we cannot assure you that we will not need
additional funds, that any needed funds will be available to us at all, or that
any available funds will be given on acceptable terms. If we need additional
funds, and are unable to raise them, we will not be able to continue our
business operations. If we raise funds by selling equity securities, those sales
may dilute your share ownership. If we raise funds by forming joint ventures
with other companies, we may have to give up some of our rights to certain
technologies, products or marketing territories.
OUR PATENTS MAY NOT PROTECT US FROM COMPETITORS.
Costs of prosecuting and defending patent infringement claims could hurt
our business. We currently own a number of patents related to our products, and
have applied for additional patents. We are not certain whether any new patents
will be granted in the future. Even if we receive additional patents, they may
not provide us with protection from competitors. Our failure to obtain patent
protection, or illegal use by others of any patents we have or may obtain could
adversely effect our business, financial condition and operating results. In
addition, the laws of certain foreign countries do not protect proprietary
rights to the same extent as the laws of the United States. Claims for damages
resulting from any such infringement may be asserted or prosecuted against us.
The validity of any patents we have or obtain could also be challenged. Any such
claims could be time consuming and costly to defend, diverting management's
attention and our resources.
WE MAY BE SUBJECT TO LIABILITY FOR TRANSMITTING INFORMATION, AND OUR INSURANCE
COVERAGE MAY BE INADEQUATE TO PROTECT US FROM THIS LIABILITY.
We may be subject to claims relating to information transmitted over
systems we develop or operate. These claims could take the form of lawsuits for
defamation, negligence, copyright or trademark infringement or other actions
based on the nature and content of the materials. Although we carry general
liability insurance, our insurance may not cover potential claims of this type
or may not be adequate to cover all costs incurred in defense of potential
claims or to indemnify us for all liability that may be imposed.
DISRUPTION OF OUR SERVICES DUE TO ACCIDENTAL OR INTENTIONAL SECURITY BREACHES
MAY HARM OUR REPUTATION CAUSING A LOSS OF SALES AND COULD INCREASE OUR EXPENSES.
A significant barrier to the growth of wireless data services or
transactions on the Internet or by other electronic means has been the need for
secure transmission of confidential information. Our systems could be disrupted
by unauthorized access, computer viruses and other accidental or intentional
actions. We may incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by such breaches. If a
third-party were able to misappropriate our users' personal or proprietary
information or credit card information, we could be subject to claims,
litigation or other potential liabilities that could materially adversely impact
our revenue and may result in the loss of customers.
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ANY TYPE OF SYSTEMS FAILURE COULD REDUCE SALES, OR INCREASE COSTS OR RESULT IN
CLAIMS OF LIABILITY.
Our existing wireless data services are dependent on real-time, continuous
feeds. The ability of our subscribers to obtain data or make securities trades
through our service requires timely and uninterrupted connections with our
wireless network carriers. Any disruption could result in delays in our
subscribers' ability to receive information or execute trades. There can be no
assurance that our systems will operate appropriately if we experience a
hardware or software failure or if there is an earthquake, fire or other natural
disaster, a power or telecommunications failure, an act of God or an act of war.
A failure in our systems could cause delays in transmitting data, and as a
result we may lose customers or face litigation that could involve material
costs and distract management from operating our business.
AN INTERRUPTION IN THE SUPPLY OF PRODUCTS AND SERVICES THAT WE OBTAIN FROM THIRD
PARTIES COULD CAUSE A DECLINE IN SALES OF OUR SERVICES.
In designing, developing and supporting our wireless data services, we rely
on wireless carriers, wireless handheld device manufacturers, content providers
and software providers. These suppliers may experience difficulty in supplying
us products or services sufficient to meet our needs or they may terminate or
fail to renew contracts for supplying us these products or services on terms we
find acceptable. Any significant interruption in the supply of any of these
products or services could cause a decline in sales of our services unless and
until we are able to replace the functionality provided by these products and
services. We also depend on third parties to deliver and support reliable
products, enhance their current products, develop new products on a timely and
cost-effective basis and respond to emerging industry standards and other
technological changes. In addition, we rely on the ability of our content to
continue to provide us with uninterrupted access to the news and financial
information we provide to our customers. The failure of third parties to meet
these criteria, or their refusal or failure to deliver the information for
whatever reason, could materially harm our business.
NEW LAWS AND REGULATIONS THAT IMPACT OUR INDUSTRY COULD INCREASE OUR COSTS OR
REDUCE OUR OPPORTUNITIES TO EARN REVENUE.
We are not currently subject to direct regulation by the Federal
Communications Commission or any other governmental agency, other than
regulations applicable to businesses in general. However, in the future, we may
become subject to regulation by the FCC or another regulatory agency. In
addition, the wireless carriers who supply us airtime are subject to regulation
by the FCC and regulations that affect them could increase our costs or reduce
our ability to continue selling and supporting our services.
OUR STOCK PRICE, LIKE THAT OF MANY TECHNOLOGY COMPANIES, MAY BE VOLATILE.
We expect that the market price of our common stock will be volatile. We
are involved in a highly visible, rapidly changing industry and stock prices in
our and similar industries have risen and fallen in response to a variety of
factors, including:
- announcements of new wireless data communications technologies and new
providers of wireless data communications;
- acquisitions of or strategic alliances among providers of wireless
data communications;
- changes in recommendations by securities analysts regarding the
results or prospects of providers of wireless data communications; and
- changes in investor perceptions of the acceptance or profitability of
wireless data communications.
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WE DO NOT PLAN TO PAY ANY DIVIDENDS.
Our shares should not be purchased by investors who need income from their
holdings. We intend to retain any future earnings to fund the operation and
expansion of our business. We do not anticipate paying cash dividends on our
shares in the future. As a result, our common stock is not a good investment for
people who need income from their holdings.
THE RESALES OF OUR COMMON STOCK RECENTLY REGISTERED COULD HAVE A DEPRESSIVE
EFFECT ON THE MARKET PRICE OF OUR SHARES.
We recently registered 3,935,134 shares of common stock subject to resale
by certain security holders of Datalink.net. Up to 1,489,170 of those shares are
issuable upon the conversion of series A convertible preferred stock and up to
2445,964 of those shares are issuable upon the exercise of warrants. As of March
7, 2000 all of the series A convertible preferred stock were converted to shares
of common stock, 772,060 of which were automatically converted in accordance
with the certificate of designation, because Datalink's common stock was trading
at a price equal to or greater than $10 per share for thirty (30) consecutive
trade days. On March 2, 2000, Datalink.net provided a notice to all current
holders of warrants exercisable at $5.00 per share, that Datalink intends to
exercise its right to redeem these warrants at $.50 each. This right of
redemption was granted to Datalink.net in the original issue if the closing
price of Datalink.net's common stock is greater than $12.50 for thirty (30)
consecutive business days. As of March 7, 2000, a total of 819,927 shares of
common stock were issued due to the exercise of these warrants. It is
anticipated that the majority of the remaining warrants subject to this right of
redemption will be exercised by April 3, 2000. We are unable to predict the
effect that sales of these shares may have on the then prevailing market price
of our shares. It is likely that market sales of large amounts of Datalink.net
shares (or the potential for those sales even if they do not actually occur)
will have the effect of depressing the market price of our shares.
USE OF PROCEEDS
Datalink.net will not receive any proceeds from the sale of the common
stock by the selling stockholders.
SELLING STOCKHOLDERS
Included in the securities being offered hereby are 1,346,154 shares being
offered for resale by certain stockholders. Up to 769,231 of those shares are
issuable upon conversion by the holders of preferred stock, and up to 576,923 of
those shares are issuable upon the exercise of certain common stock purchase
warrants. The shares are being offered for the account of the stockholders in
the table below and their donees or pledgees.
The following table sets forth information concerning the selling
stockholders, including:
- the maximum number of shares issued or issuable upon conversion of
preferred stock;
- the maximum number of the shares issued or issuable upon exercise of
common stock purchase warrants; and
- the number of shares offered by each selling stockholder.
Datalink.net has no knowledge of the intentions of any selling stockholder to
actually sell any of the securities listed under the columns "Shares Offered".
There are no material relationships between any of the selling stockholders and
Datalink.net other than as disclosed below.
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<TABLE>
<CAPTION>
Beneficial Ownership Before Offering
- -------------------------------------------------------------------------------------------------------------
Number of Shares
Issued or Issuable Shares Issued
on Conversion of or Issuable on
Selling Stockholder Preferred Stock Exercise of Warrants Shares Offered
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Brown Simpson Strategic
Growth 500,000 375,000 875,000
Fund, Ltd.
- -------------------------------------------------------------------------------------------------------------
Brown Simpson Strategic
Growth 269,231 201,923 471,154
Fund, L.P.
- -------------------------------------------------------------------------------------------------------------
TOTAL 769,231 576,923 1,346,154
- -------------------------------------------------------------------------------------------------------------
</TABLE>
No information is given with respect to beneficial ownership after the offering
because the number of shares held would be zero.
The information concerning the selling stockholders may change from time to
time and will be set forth in supplements to this prospectus.
PLAN OF DISTRIBUTION
The purpose of this prospectus is to permit the selling stockholders to
offer and sell up to 1,346,154 shares at such times and at such places as they
choose. The decision to convert preferred stock into shares, to exercise common
stock purchase warrants or to sell any shares, is within the sole discretion of
the holders thereof.
The distribution of the common stock by selling stockholders may be
effected from time to time in one or more transactions. Any of the common stock
may be offered for sale, from time to time, by the selling stockholders, or by
permitted transferees or successors of the selling stockholders, on the American
Stock Exchange, or otherwise, at prices and on terms then obtainable, at fixed
prices, at prices then prevailing at the time of sale, at prices related to such
prevailing prices, or in negotiated transactions at negotiated prices or
otherwise. The common stock may be sold by one or more of the following:
* On the American Stock Exchange or any other national common stock
exchange or automated quotation system on which our common stock is
traded, which may involve transactions solely between a broker-dealer
and its customers which are not traded across an open market and block
trades.
* Through underwriters, or through underwriting syndicates.
* Through one or more dealers or agents (which may include one or more
underwriters), including, but not limited to:
a. Block trades in which the broker or dealer act as principal to
facilitate the transactions.
b. Purchases by a broker or dealer as principal and resale by such
broker or dealer for its account pursuant to this prospectus.
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c. Ordinary brokerage transactions.
d. Transactions in which the broker solicits purchasers.
* Directly to one or more purchasers
* A combination of these methods.
The names of any underwriters or agents involved in the sale of the common
stock will be set forth in a prospectus supplement.
In connection with the distribution of the common stock or otherwise, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of
shares in the course of hedging the positions they assume with the selling
stockholders. The selling stockholders may also sell shares short and redeliver
the shares to close out such short positions. The selling stockholders may also
enter into options or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealers or other
financial institutions of the common stock, which shares such broker-dealers or
financial institutions may resell pursuant to this prospectus, as supplemented
or amended to reflect this transaction. The selling stockholders may also pledge
the common stock registered hereunder to a broker-dealer or other financial
institution and, upon a default, such broker-dealer or other financial
institution may effect sales of the pledged shares pursuant to this prospectus,
as supplemented or amended to reflect such transaction. In addition, any common
stock covered by this prospectus that qualify for sale pursuant to Rule 144
under the Securities Act may be sold under Rule 144 rather than pursuant to this
prospectus.
The selling stockholders or their underwriters, dealers or agents may sell
the common stock to or through underwriters, dealers or agents, and such
underwriters, dealers or agents may receive compensation in the form of
discounts or concessions allowed or reallowed. Underwriters, dealers, brokers or
other agents engaged by the selling stockholders may arrange for other such
persons to participate. Any fixed public offering price and any discounts and
concessions may be changed from time to time. Underwriters, dealers and agents
who participate in the distribution of the common stock may be deemed to be
underwriters within the meaning of the Securities Act, and any discounts or
commissions received by them or any profit on the resale of shares by them may
be deemed to be underwriting discounts and commissions thereunder. The proposed
amounts of the common stock, if any, to be purchased by underwriters and the
compensation, if any, of underwriters, dealers or agents will be set forth in a
prospectus supplement.
Unless granted an exemption by the Commission from Rule 10b-6 under the
Exchange Act, or unless otherwise permitted under Rule l0b-6, the selling
stockholders will not engage in any stabilization activity in connection with
the Company's common stock, will furnish each broker or dealer engaged by the
selling stockholders and each other participating broker or dealer the number of
copies of this prospectus required by such broker or dealer, and will not bid
for or purchase any common stock of the Company or attempt to induce any person
to purchase any of the common stock other than as permitted under the Exchange
Act.
Datalink.net will not receive any proceeds from any sales of the common
stock.
Datalink.net shall use its best efforts to prepare and file with the
Commission such amendments and supplements to the registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the Common
stock Act with respect to the disposition of the common stock covered by the
registration statement for the period required to effect the distribution of
such common stock.
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Datalink.net is paying certain expenses (other than commissions and
discounts of underwriters, dealers or agents) incident to the offering and sale
of the common stock to the public, which are estimated to be approximately
$35,759.40. If Datalink.net is required to update this prospectus during such
period, it may incur additional expenses in excess of the amount estimated
above.
In order to comply with certain states, common stock laws, if applicable,
the common stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the common stock may not be sold
unless they have been registered or qualify for sale in such state or an
exemption from registration or qualification is available and is complied with.
DESCRIPTION OF SECURITIES
Datalink.net has 55,000,000 authorized shares of stock, consisting of
50,000,000 shares of common stock, having a par value of $.01 per share, and
5,000,000 shares of preferred stock, having a par value of $.001 per share.
COMMON STOCK
As of March 3, 2000, there were 5,996,019 shares of common stock
outstanding. All such outstanding shares of common stock are fully paid and
non-assessable. Each share of common stock has an equal and ratable right to
receive dividends when declared by the Board of Directors of Datalink.net out of
assets legally available for that purpose and subject to the dividend
obligations of Datalink.net to holders of any preferred stock then outstanding.
In the event of a liquidation, dissolution or winding up of Datalink.net
the holders of common stock are entitled to share equally and ratably in the
assets available for distribution after payment of all liabilities, and subject
to any prior rights of any holders of preferred stock outstanding at that time.
The holders of common stock have no preemptive, subscription, conversion or
redemption rights, and are not subject to further calls or assessments of
Datalink.net. Each share of common stock is entitled to one vote in the election
of directors and on all other matters, submitted to a vote of stockholders.
Datalink.net's Articles of Incorporation provide that a holder of any class
or series of stock entitled to vote in the election of directors shall be
entitled to cumulate his votes, and may cast votes equal to the number of votes
which (except for cumulative voting) he would be entitled to cast for the
election of directors with respect to his shares of stock multiplied by the
number of directors to be elected. Such shareholders may cast all such votes for
a single director or allocate such votes to two or more directors as such
shareholder sees fit. Under Nevada law, to exercise the right to cumulative
voting, a shareholder must give Datalink.net written notice of his intent to do
so at least 48 hours before the time fixed for the annual meeting. Such written
notice must be given to the president or secretary of Datalink.net.
PREFERRED STOCK
Preferred stock may be issued from time to time in one or more series, and
the board of directors, without further approval of the stockholders, is
authorized to fix the dividend rates and terms, conversion rights, voting
rights, redemption rights and terms, liquidation preferences and any other
rights, preferences, privileges and restrictions applicable to each series of
preferred stock. The purpose of authorizing the board of directors to determine
such rights, preferences, privileges and restrictions is to eliminate delays
associated with a stockholder vote on specific issuances. The issuance of
preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting power of the holders of common stock and, under some
circumstances, make it more difficult for a third party to gain control of
Datalink.net.
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SERIES B CONVERTIBLE PREFERRED STOCK
As of March 2000, Datalink.net had 769,231 shares of preferred stock
outstanding, designated as series B convertible preferred stock. The preferred
stock is convertible into common stock on a 1 for 1 basis. Holders of preferred
stock are entitled to receive dividends equal to any dividends paid on the
common stock. Holders of preferred stock are entitled to vote together with the
holders of common stock on an "as-converted" basis. In the event of a
liquidation of Datalink.net, holders of preferred stock are entitled to receive
$13.00 per share prior to any distributions to be made to holders of common
stock. The series B convertible preferred stock is subject to a right of first
refusal held by Datalink.net.
PRIVATE PLACEMENT WARRANTS
As part of a private placement that was completed in February 2000,
Datalink.net issued warrants to the selling stockholders to purchase up to
576,923 shares of common stock, all of which are included in this prospectus.
Each warrant gives the holder the right to purchase one share of common stock at
$17.50 per share and are exercisable at any time until February 9, 2005. Each
warrant is also subject to a right of first refusal held by Datalink.net.
LEGAL MATTERS
The legality of the shares offered hereby is being passed upon for
Datalink.net by: Greenberg Glusker Fields Claman & Machtinger, LLP, 1900 Avenue
of the Stars, Suite 2100, Los Angeles, California 90067.
EXPERTS
The financial statements incorporated by reference in this prospectus have
been audited by BDO Seidman, LLP, independent certified public accountants, to
the extent and for the periods set forth in their report, incorporated by
reference herein, and are incorporated herein in reliance upon such report given
upon the authority of that firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by Datalink.net with the Commission are
incorporated herein by reference:
(a) Datalink.net's Form 8-K filed on February 17, 2000.
(b) Datalink.net's quarterly report on Form 10-QSB for the quarter ended
December 31, 1999 (SEC File No. 1-15569).
(c) Datalink.net's quarterly report on Form 10-QSB for the quarter
ended September 30, 1999 (SEC File No. 33-21508).
(d) Datalink.net's quarterly report on Form 10-QSB for the quarter ended
June 30, 1999 (SEC File No. 0-21069).
(e) Datalink.net's annual report on Form 10-KSB for the fiscal year
ended March 31, 1999 (SEC File No. 0-21069).
(f) The description of Datalink.net's shares contained in the
registration statement on Form 8-A filed on December 21, 1999.
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All reports and other documents subsequently filed by Datalink.net with the
SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities covered by this prospectus have been sold or which deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing of such
reports and documents.
AVAILABLE INFORMATION
Datalink.net is subject to certain informational reporting requirements of
the Exchange Act and in accordance therewith files reports and other information
with the Securities and Exchange Commission. These reports, proxy statements and
other information can be inspected and copied at the public reference facilities
maintained by the SEC at Room 1024 of the SEC's office at 450 Fifth Street,
N.W., Judiciary Plaza, Washington, DC 20549, and at its regional offices located
at 7 World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such reports,
proxy statements and other information can be obtained from the Public Reference
Section of the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, DC
20549 at prescribed rates. The SEC maintains a Web site (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants that file electronically. Additional updating information
with respect to the securities covered herein may be provided in the future to
purchasers by means of appendices to this prospectus.
Datalink.net has filed with the SEC in Washington, DC a registration
statement under the 1933 Act with respect to the securities offered or to be
offered hereby. This prospectus does not contain all of the information included
in the registration statement, certain items of which are omitted in accordance
with the rules and regulations of the SEC. For further information about
Datalink.net and the securities offered hereby, reference is made to the
registration statement and the exhibits thereto. The registration statement has
been filed electronically through the SEC's Electronic Data Gathering, Analysis
and Retrieval System and may be obtained through the SEC's Web site
(http://www.sec.gov.).
Datalink.net will provide without charge to each person to whom this
prospectus is delivered, on the written or oral request of such person, a copy
of any document incorporated herein by reference, excluding exhibits. Requests
should be made to Datalink.net, Inc. 1735 Technology Drive, Suite 790, San Jose,
California 95110, telephone (408) 367-1700, and directed to the attention of
William A. Mahan, Chief Financial Officer.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, hereunto duly authorized, in San Jose, California, on March 16,
2000.
By: /s/ Anthony N. LaPine
Anthony N. LaPine,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment to Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
---------- ----- ----
<S> <C> <C>
/s/ Anthony N. LaPine Chief Executive Officer, President and March 16, 2000
- ---------------------------- Chairman of the Board
Anthony N. LaPine
/s/ William A. Mahan Chief Financial Officer March 16, 2000
- ----------------------------
William A. Mahan
- ---------------------------- Director March 16, 2000
Frederick M. Hoar*
- ---------------------------- Director March 16, 2000
Charles K. Dargan, II*
- ---------------------------- Director March 16, 2000
Jason Pavona*
*BY: /S/ Anthony N. LaPine
------------------------
Anthony N. LaPine
Attorney-in-Fact
</TABLE>
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