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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DATALINK.NET, INC.
(Formerly Named Datalink Systems Corporation)
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(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
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(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
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(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]
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: [ ]
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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: [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE PRICE REGISTRATION FEE
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Common Stock, $.01 246,923(1) $22.625 (2) $5,654,507.80 $1,492.79
Par Value
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1. In accordance with Rule 416 under the Securities Act of 1933, this
registration statement also covers an indeterminable number of shares of common
stock, $.01 par value, as may become issuable upon conversion of the Series B
convertible preferred stock and the exercise of the common stock purchase
warrants to prevent dilution resulting from stock splits, stock dividends, and
similar transactions in accordance with the terms of the Series B convertible
preferred stock and the common stock purchase warrants.
2. Based upon the average of the high and low sale price of the common
stock as reported by the American Stock Exchange on April 14, 2000, estimated
solely for the purpose of calculating the registration fee in accordance with
Rule 457(c) under the Securities Act of 1933.
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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PROSPECTUS SUBJECT TO COMPLETION DATED ________ ___, 2000
The information in this prospectus is not complete and may be changed. The
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
DATALINK.NET, INC.
[LOGO]
246,923 SHARES OF COMMON STOCK
-----------------------------
This prospectus relates to the possible offer and sale from time to time of
up to 246,923 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 in order to provide
the selling stockholders with free tradable securities, but the registration of
such shares does not necessarily mean 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 April 18, 2000, the closing sale price of our common stock
was $21. As of April 18, 2000, the year high and low closing prices for our
common stock were $89 1/4 and $2 7/16, respectively. After April 27, 2000 this
prospectus will relate to a total of 499,846 shares of common stock as a result
of a 2 for 1 stock split.
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 _____________, 2000
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TABLE OF CONTENTS
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Page
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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. It is our belief that 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 affect 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 1,346,154 shares of common stock subject to resale
by certain security holders of Datalink.net. Up to 769,231 of those shares are
issuable upon the conversion of Series B Convertible Preferred Stock and up to
576,923 of those shares are issuable upon the exercise of warrants. 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
Certain stockholders may offer 246,923 shares of common stock for resale.
Up to 226,923 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 number of shares owned by each selling stockholder;
- the maximum number of the shares 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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Beneficial Ownership Before Offering
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Selling Stockholder Shares Owned (1) Shares Offered
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The Seidler Companies Incorporated (2) 10,000 10,000
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H.C. Wainwright & Co., Inc. 38,371 38,371
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Scott Weisman 16,184 16,184
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Jason T. Adelman 16,184 16,184
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Mathew Balk 16,184 16,184
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Anthony N. LaPine (3) 1,155,000 150,000
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TOTAL 1,251,923 246,932
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(1) Includes shares subject to options and warrants that are exercisable within
sixty (60) days.
(2) Charles K. Dargan, a director of Datalink.net and Executive Vice President
of Operations and Administration for Datalink.net, is the Managing Director
of Corporate Finance for The Seidler Companies Incorporated.
(3) Anthony N. LaPine, one of the selling securityholders, has served as CEO,
President and Chairman of the board of Datalink.net since September 1997.
No information is given with respect to beneficial ownership after the offering
because the number of shares held would be zero, except that Anthony N. LaPine
would beneficially own 1,005,000 shares of common stock, consisting of 500,000
shares owned directly, 200,000 shares issuable upon the exercise of common stock
purchase warrants and 305,000 shares underlying options held by Mr. LaPine and
his wife, which would represent 15.14% of the outstanding shares if no other
preferred stock or warrants are exercised.
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 246,932 shares at such times and at such places as they
choose. The decision 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:
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* 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.
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
12
<PAGE> 13
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
Securities 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.
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
$5,692.79. 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 April 17, 2000, there were 6,637,438 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.
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<PAGE> 14
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.
PLACEMENT AGENT WARRANTS
In connection with a private placement in February 2000, Datalink.net
issued to H.C. Wainwright & Co., the placement agent, and its designees warrants
to purchase up to 76,923 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 $13.00 per share and are exercisable at any time until
February 14, 2005.
LAPINE WARRANT
On December 1, 1999, Datalink.net's Board of Directors authorized
Datalink.net to issue to Anthony N. LaPine, the President and CEO of
Datalink.net, a warrant to purchase 150,000 shares of common stock, of which is
included in this prospectus. The warrant gives the holder the right to purchase
one share of common stock at $4.75 per share and is exercisable in whole or in
part at any time until December 1, 2004.
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).
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<PAGE> 15
(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.
15
<PAGE> 16
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.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses incurred in connection with the sale of the
securities being registered will be borne by the Registrant. Other than the
registration fee, the amounts stated are estimates.
<TABLE>
<S> <C>
Registration Fees................................................$1,492.79
Legal Fees and Expenses...........................................1,500.00
Accounting Fees and Expenses......................................2,500.00
Miscellaneous.......................................................200.00
---------
TOTAL............................................................$5,692.79
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
The only statute, charter provision, bylaw, contract, or other arrangement
under which any controlling person, director or officer of Datalink.net is
insured or indemnified in any manner against any liability which he may incur in
his capacity as such, is as follows:
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<PAGE> 17
(a) Subsection (1) of Section 78.751 of the Nevada Corporation Law empowers
a corporation to "indemnify any person who is a party or is threatened to be
made a party to any threatened pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe that his conduct was unlawful."
Subsection (2) of Section 78.751 empowers a corporation to "indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses, including amounts paid in settlement and attorneys'
fees actually and reasonably incurred by him in connection with the defense or
settlement of the action or suit if he acted in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
corporation. Indemnification may not be made for any claim, issue or matter as
to which such a person has been adjudged by a court of competent jurisdiction,
after exhaustion of all appeals therefrom, to be liable to the corporation or
for amounts paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnify for such expenses as the court deems proper."
Subsection 78.751(3) further provides that "to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections 1 and 2, or in defense of any claim, issue or matter herein he must
be indemnified by the corporation against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the defense."
(b) Article VII of Datalink.net's Articles of Incorporation provides that
Datalink.net is authorized to indemnify directors, officers, employees and
agents to the full extent allowed for under the Nevada Business Corporation Act.
(c) Article XI of the Articles of Incorporation of Datalink.net provides
that no director, officer or stockholder of Datalink.net shall be personally
liable for damages for breach of fiduciary duty as a director or officer;
provided, that this provision shall not eliminate liability of a director or
officer for acts or omissions involving intentional misconduct, fraud or a
knowing violation of law or payments or distributions in violation of Nevada
law.
17
<PAGE> 18
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Description Location
- --------- ----------- --------
<S> <C> <C>
4.1 Warrant to purchase up to 76,923 shares of common stock Incorporated by reference to Exhibit
issued to H.C. Wainwright & Co., Inc., dated February 4.4 to the Registrant's Form 8-K filed
14, 2000. February 17, 2000.
4.2 Warrant to purchase up to 150,000 shares of common stock
issued to Anthony N. LaPine, dated December 1, 1999.
Letter Agreement, dated as of September 7, 1999, by and
10.1 between The Seidler Companies Incorporated and
Datalink.net.
5.1 Opinion of Greenberg Glusker Fields Claman & Machtinger
LLP regarding the legality of the securities being
registered.
23.1 Consent of BDO Seidman, LLP.
23.2 Consent of Greenberg Glusker Fields Claman & Machtinger
LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (contained in the signature page
hereof).
- -------------------------------------------------------------------------------------------------------------
</TABLE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(a) To include any prospectus required by Section 10(a)(3) of the 1933
Act;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) (Section 230.424(b) of this
chapter) if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Feel, table in the effective registration
statement.
18
<PAGE> 19
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by Datalink.net pursuant to
Section 13 or Section 15(d) of the 1934 Act that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the 1933 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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of Datalink.net's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the 1934 Act) 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.
Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers and controlling persons of Datalink.net
pursuant to the foregoing provisions, or otherwise, Datalink.net has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by Datalink.net of expenses incurred or paid by a director, officer
or controlling person of Datalink.net 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, Datalink.net will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
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<PAGE> 20
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 Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, hereunto
duly authorized, in San Jose, California, on April 19, 2000.
By: /s/ Anthony N. LaPine
-------------------------------------
Anthony N. LaPine,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL ME BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Anthony N. LaPine and William A. Mahan his true
and lawful attorneys-in-fact and agents, each acting alone, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, and hereby ratifies and confirms all his said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this 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 April 19, 2000
Anthony N. LaPine Chairman of the Board
/s/ William A. Mahan Chief Financial Officer April 19, 2000
William A. Mahan
/s/ Frederick M. Hoar Director April 19, 2000
Frederick M. Hoar
/s/ Charles K. Dargan, II Director April 19, 2000
Charles K. Dargan, II
/s/ Jason Pavona Director April 19, 2000
Jason Pavona
</TABLE>
S-1
<PAGE> 1
Exhibit 4.2
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE, OR UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES ARE RESTRICTED
AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
DATALINK.NET, INC.
Incorporated Under the Laws of the State of Nevada
No. A-1 150,000 Common Stock Purchase Warrants
CERTIFICATE FOR COMMON STOCK
PURCHASE WARRANTS
1. Warrants. This Warrant Certificate certifies that ANTHONY N. LAPINE, or
registered assigns (the "Holder"), is the registered owner of the
above-indicated number of Warrants expiring on December 1, 2004 ("Expiration
Date"). One (1) Warrant entitles the Holder to purchase one share of common
stock, $.01 par value ("Share"), from Datalink.net, Inc., a Nevada corporation
("Company"), at a purchase price of $4.75 per share ("Exercise Price"),
commencing December 1, 1999, and terminating on the Expiration Date ("Exercise
Period"), upon surrender of this Warrant Certificate with the exercise form
hereon duly completed and executed with payment of the Exercise Price at the
offices of the Company, 1735 Technology Drive, Suite 790, San Jose, California
95110.
2. Transfer of Warrants. The Warrants represented by this Warrant
Certificate shall not be transferable except upon the death of the Holder and
then only to the estate of the Holder or pursuant to the Holder's will or the
applicable laws of descent and distribution.
3. Exercise of Warrant. The Warrant may be exercised in whole or in part at
any time on or before the Expiration Date upon surrender of the Warrant in
conjunction with Form of Election to Purchase and the payment at the Exercise
Price stipulated above. If the Warrant is exercised in part, then the Holder
shall be entitled to receive a new Warrant covering the remaining number of
Warrant Shares not exercised.
4. Expiration of Warrants. No Warrant may be exercised after 5:00 p.m.
Pacific Time on the Expiration Date and any Warrant not exercised by such time
shall become void, unless the Expiration Date of this Warrant is extended by the
Company.
<PAGE> 2
5. Adjustment of Exercise Price. After each adjustment of the Exercise
Price pursuant to this paragraph 5, the number of shares of Common Stock
purchasable on the exercise of each Warrant shall be the number derived by
dividing such adjusted pertinent Exercise Price into the original pertinent
Exercise Price. The pertinent Exercise Price shall be subject to adjustment as
follows:
In the event, prior to the expiration of the Warrants by exercise or
by their terms, the Company shall issue any shares of its Common Stock as a
share dividend or shall subdivide the number of outstanding shares of
Common Stock into a greater number of shares, then, in either of such
events, the Exercise Price per share of Common Stock purchasable pursuant
to the Warrants in effect at the time of such action shall be reduced
proportionately and the number of shares purchasable pursuant to the
Warrants shall be increased proportionately. Conversely, in the event the
Company shall reduce the number of shares of its outstanding Common Stock
by combining such shares into a smaller number of shares, then, in such
event, the Exercise Price per share purchasable pursuant to the Warrants in
effect at the time of such action shall be increased proportionately and
the number of shares of Common Stock at that time purchasable pursuant to
the Warrants shall be decreased proportionately. Any dividend paid or
distributed on the Common Stock in shares of any other class of the Company
or securities convertible into shares of Common Stock shall be treated as a
dividend paid in Common Stock to the extent that shares of Common Stock are
issuable on the conversion thereof.
6. Adjustments for Reorganization, Consolidation, Merger, or Sale of
Assets. If at any time while the Warrant, or any portion thereof, remains
outstanding and unexpired, should there occur a reorganization, merger, or
consolidation; or should there occur a sale or transfer of the Company's assets
or properties substantially in entirety as part of a reorganization, merger or
consolidation, then lawful provision shall be made so that the Holder shall
thereafter be entitled to receive upon exercise of the Warrant, or any unexpired
exercisable portion thereof, the number of shares of stock or other securities
or property of the successor corporation resulting from such reorganization,
consolidation, merger, sale or transfer that the Holder would have been entitled
to if the Warrant, or portions thereof, had been exercised immediately prior to
the event. The foregoing shall apply similarly to any successive
reorganizations, consolidations, mergers, sales or transfers that may occur
while the Warrant, or any portion thereof, remains exercisable.
7. Reservation of Stock Underlying the Warrant. At all times until the
expiration of the Warrant, the Company will authorize, reserve, and keep
available, solely for issuance and delivery upon the exercise of the Warrant,
the shares of Common Stock of the Company that shall be receivable upon exercise
of the Warrant.
8. Underlying Stock to be Fully Paid and Non-Assessable. The Company
covenants that the shares of Common Stock issuable upon exercise of the Warrant
shall be duly and validly issued, fully paid, non-assessable, and free of any
liens, charges, and all taxes with respect to the issue thereof.
9. No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or other method or venue, avoid or seek to avoid the observance or
performance of any of the terms of the Warrant, but shall at all times, in good
faith, take all such actions as may be necessary or appropriate in order to
protect the rights of the Holder thereunder against impairment.
<PAGE> 3
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
President and attested to by its Secretary.
Dated: December 1, 1999
DATALINK.NET, INC.
Attest:
/s/ Bill Mahan By: /s/ Anthony LaPine
- -------------------------- ---------------------------------
Bill Mahan, CFO, Treasurer Anthony LaPine, President and CEO
and Secretary
<PAGE> 4
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder if he desires to exercise
Warrants evidenced by the within Warrant Certificate)
To Datalink.net, Inc.:
The undersigned hereby irrevocably elects to exercise ____________
Warrants, evidenced by the within Warrant Certificate for, and to purchase
thereunder, ________________ full shares of Common Stock issuable upon exercise
of said Warrants and delivery of $____________ and any applicable taxes.
The undersigned requests that certificates for such shares be issued in the
name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
- ------------------------------- -------------------------------------
(Please print name and address)
- ------------------------------- -------------------------------------
- ------------------------------- -------------------------------------
If said number of Warrants shall not be all the Warrants evidenced by the
within Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so exercised be issued in the name of
and delivered to:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
(Please print name and address)
Dated: ____________________ Signature: _________________________________
NOTICE: The above signature must correspond with the name as written
upon the face of the within Warrant Certificate in every
particular, without alteration or enlargement or any change
whatsoever, or if signed by any other person the Form of
Assignment hereon must be duly executed and if the certificate
representing the shares or any Warrant Certificate
representing Warrants not exercised is to be registered in a
name other than that in which the within Warrant Certificate
is registered, the signature of the holder hereof must be
guaranteed.
Signature Guaranteed: __________________________________________
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
<PAGE> 1
Exhibit 10.1
September 7, 1999
Mr. Anthony LaPine
Chief Executive Officer
Datalink.net, Inc.
1735 Technology Drive
Suite 790
San Jose, CA 95110
PERSONAL AND CONFIDENTIAL
Dear Tony:
This letter agreement (the "Agreement") confirms the terms and conditions
of the engagement of The Seidler Companies Incorporated ("TSC") by Datalink.net,
Inc. ("Datalink" or the "Company") to render certain financial and advisory and
investment banking services to Datalink in connection with a proposed $5 million
to $10 million public or private financing (the "Transaction").
TSC's principle business is to provide financial, consulting and investment
banking services to corporate clients.
Datalink has advised TSC that Datalink requires additional capital in order
to consummate its business plan.
1. In order to finance Datalink, TSC agrees to perform the following services
(the "Services"):
(a) At Datalink's request, review current and historical financial and
operating information of the Company;
(b) At Datalink's request, help the Company prepare an executive summary
of its business plan;
(c) At Datalink's request, advise and assist the Company in its due
diligence investigation of any potential investor;
(d) At Datalink's request, advise and assist the Company in negotiations
with any potential investor;
(e) At Datalink's request, advise and assist the Company in the valuation
and structuring of a financing.
2. The Company agrees to pay TSC for its services as follows:
(a) A retainer fee of 10,000 shares of Datalink common stock with
appropriate restrictions upon the signing of this Agreement, one half
(or 5,000 shares) to be granted upon the
<PAGE> 2
signing of the Agreement, and the remaining five thousand (5,000)
shares to be granted in installments of 1,000 shares per month for the
next five months;
(b) A success fee based upon the type of financing arranged by TSC, but in
no event shall the fee exceed five percent (5%) of the total money
raised by TSC's financing efforts. If other third parties assist the
Company in raising money, the total success fee of 5% will be divided
among all parties, based upon each party's services to the Company.
3. The term of this Agreement shall commence on the date hereof and end 12
months thereafter. This Agreement may be renewed upon mutual written agreement
of TSC and the Company. Either party may terminate this Agreement at any time by
giving the other party at least thirty (30) days prior written notice of such
termination, at which time the Company shall pay to TSC all fees earned and all
reasonable expenses incurred, in accordance with Paragraphs 2 and 4 hereof. The
Company agrees to pay TSC any fees specified in paragraph 2 if the events
specified therein shall occur during the term of this Agreement. Any obligation
pursuant to this Paragraph 3 shall survive the termination or expiration of this
Agreement.
4. The Company agrees to reimburse TSC for all of its reasonable out-of-pocket
fees, expenses and costs (including, but not limited to, travel, accommodations,
telephone, computer, courier and supplies) in connection with the performance of
its activities under this Agreement, provided that such expenses do not exceed
five hundred dollars ($500) in any single month without prior approval by the
Company. All such fees, expenses and costs will be billed monthly and are
payable when invoiced. Upon termination or expiration of the Agreement, any
unreimbursed fees and expenses will be immediately due and payable. Any
obligation pursuant to this Paragraph 4 shall survive the termination or
expiration of this Agreement.
5. In addition to the payment of fees and reimbursement of fees and expenses
provided for above, and regardless of whether a Transaction is consummated, the
Company agrees to indemnify TSC with regard to the matters contemplated herein,
as set forth in Appendix A, attached hereto, which is incorporated by reference
as if fully set forth herein. This Paragraph 5 shall survive the termination or
expiration of this Agreement.
6. Each party agrees that, except as compelled by law, it will not disclose the
services or advice to be provided by TSC under this Agreement publicly or to any
third party without the prior written approval of the other party.
Notwithstanding, TSC shall be permitted to advertise the services it provided in
connection with this financing subsequent to a consummation of the financing.
7. In providing the Services, TSC acknowledges that it shall have no authority
to bind the Company in any respect.
8. Any and all information, in any form, given by the Company to TSC shall be
treated as confidential, whether or not it is labeled as such. This information
shall be treated in a manner no less restrictive than the strictest procedures
used by TSC to protect its own confidential information. TSC agrees not to
disclose this information to others except to those employees who are required
to have the information in order to carry out the contemplated purposes
described in this Agreement. TSC agrees to notify the Company in writing of any
misuse or misappropriation of such confidential information. TSC's obligation
under this paragraph shall survive for two years after the termination of this
Agreement. Any
<PAGE> 3
materials or documents which have been furnished to TSC in accordance to this
agreement will be promptly returned at the Company's request, or upon
termination of the Agreement.
9. This Agreement shall be governed by and construed in accordance with the laws
of the State of California without regard to the conflict of laws or provisions
thereof and may not be amended or modified except in a writing signed by both
parties.
10. This Agreement and all rights, liabilities and obligations hereunder shall
be binding upon and inure to the benefit of each party's successors but may not
be assigned without the prior written approval of the other party.
11. In the event a disagreement between the parties cannot be resolved, the
parties mutually agree to resolve any conflicts through arbitration proceedings.
Please confirm that the foregoing correctly sets forth our agreement by
signing the enclosed letters in the space provided and returning them to use for
execution, whereupon we will send you a fully executed original letter which
shall constitute a binding agreement as of the date first above written.
THE SEIDLER COMPANIES, INC.
By: /s/ Charles K. Dargan
---------------------------
Charles K. Dargan, II
Managing Director
Corporate Finance
Agreed to and accepted as
of the above date.
DATALINK.NET, INC.
By: /s/ Anthony LaPine
------------------------
Anthony LaPine
Chief Executive Officer
<PAGE> 1
[GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP LETTERHEAD]
April 6, 2000
Datalink.net, Inc.
1735 Technology Drive, Suite 790
San Jose, CA 95110
Re: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3 to
be filed by Datalink.net, Inc. (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 246,923 shares of the Company's Common Stock, par
value $0.01 per share, of which 20,000 of those shares are currently issued and
outstanding (the "Common Shares") and 226,923 of those shares are issuable upon
the exercise of common stock purchase warrants (the "Warrant Shares").
As your counsel, we are familiar with the proceedings taken in connection
with the authorization, issuance and delivery of the Common Shares and the
Warrant Shares, and we have examined such matters of fact and law as we have
deemed relevant in connection with this opinion.
Based upon the foregoing, we are of the opinion that (i) the Common Shares
are legally and validly issued, fully paid and non-assessable and (ii) the
Warrant Shares when issued upon the exercise of the common stock purchase
warrants and payment of the purchase price in accordance with the warrants and
the resolutions of the Board of Directors of the Company, will be legally and
validly issued, fully paid and non-assessable.
<PAGE> 2
Datalink.net, Inc.
April 6, 2000
Page 2
We consent to the use of this opinion as an exhibit to the Registration
Statement and the reference to our firm under the caption "Legal Matters" in the
Prospectus that is a part thereof.
Respectfully submitted,
/s/ GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP
GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 of our report dated May 20, 1999, relating to the
consolidated financial statements of Datalink.net appearing in the Annual Report
on Form 10-KSB for the year ended March 31, 1999.
/S/ BDO Seidman, LLP
BDO Seidman, LLP
San Jose, California
April 19, 2000
